Should inheritance tax be scrapped?

Former_MSE_Debs

Poll started 1 Apr 2014

The Prime Minister has said he’d like to raise the threshold at which you pay inheritance tax to £1m (currently, it’s £325,000 or £650,000 for a couple, as allowances can be transferred).


Which of the options in this week's poll is CLOSEST to your view on inheritance tax?

Vote in this week's poll

Did you vote? Why did you pick that option? Are you surprised at the results so far? Have your say below. To see the results from last time, click this

If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.


[threadbanner]box[/threadbanner]

cepheus

What a depressing poll. Nearly everyone expects unearned income by privilege of parents wealth, inequality would increase along with the enormous disadvantages for society, and more than 90% of people would lose if it were scrapped, since very few people pay it and essential revenue would have to be made up from other sources.

How stupid can people be? Perhaps MSErs or at least those who vote in these polls are part of the silver spoon club?

If you want to reward workers, rather than layabouts, as Conservatives claim, inheritance thresholds should be lowered, and the proceeds used to increase the minimum wage or the lower income tax threshold. Instead they do the opposite, because they know their voters are selfish, greedy and simply don't care.

(PS I would have to pay IHT in my present circumstances)

Penny55

I never understand the public desire to scrap Inheritance Tax. Only around 3% of estates pay the tax and yet it seems a majority believe it to be unfair.

It is argued that they have worked hard and already paid tax on their income. Most people have worked hard throughout their lives but most do not accumulated that kind of wealth. Those that have spent their money will have paid VAT on most purchases.

I would be in favour of tightening the rules on IHT. If you wish to scrap it which other tax would you increase to pay for it?

pollypenny

Agree with Cephus.

I'd also lower it, but add a sliding scale.

XRAT

The more I find out about tax, the less I like it.
Wealthy people rarely pay inheritance tax, or anywhere near the amount of income tax that poor people pay through ignorance (I don't mean that rudely.)
The older I get the more I earn.., AND the less tax I pay through experience. That has to be wrong.
The people I feel most sorry for are the ones working longer and longer hours just to hand it all back in tax!

Karl_Karlsson

I too find these results depressing. I voted for Keep It - though I think there are two valid grievances to have.

1) Rampant house price inflation will mean that more and more people get dragged into this. While I believe they should pay it, sorting out crazy prices would be a good complimentary measure

2) As has been said, the truly rich pay accountants to ensure they evade this tax. Basic planning is fine, but offshoring etc take the p**s


The non-valid grievances are "I've already paid tax" yadda yadda yadda - Tax is the price of living in a functioning developed society. The coalition are already failing in terms of 'the poor', and changing this would be another punch in their stomach.

Andy_L

Penny55 wrote: »

It is argued that they have worked hard and already paid tax on their income.

AIUI the biggest cause of people entering the IHT bracket is house price inflation, which is unlikely to have had any tax paid on the gain (perhaps some stamp duty or CGT if its a rental property)

Daisy-Belle

Rather than taxing estates inheritance should be taxed as income for the recipients. This would mean those who were already wealthy paid lots as they would already be paying the highest rate of tax on their own income. Those who had little would not pay much especially if any inheritance was divided among more beneficiaries. Grandparents may then divide their estate between their grandchildren or great grandchildren rather than their already well off children

Gavin83

Karl_Karlsson wrote: »

The non-valid grievances are "I've already paid tax" yadda yadda yadda - Tax is the price of living in a functioning developed society. The coalition are already failing in terms of 'the poor', and changing this would be another punch in their stomach.

How is the Government failing the poor? This is one of the best countries in the World to live in for those with little or no job prospects, or those that choose not to work.

I also don't think the current threshold is that high. People are claiming here that only the rich fall into that bracket but I don't believe that's true. Around my way even a basic flat would cost more than £325k, there are plenty of elderly who are on paper fairly poor but bought their house years back and therefore are pushed into the category.

My parents house is worth more than this, there is no way they could be considered anything other than financially average however. They originally paid £33k for the house they now live in.

However saying that I'm not against this tax. I'm of the belief no one has the right to inherit and therefore it seems fair to place this tax here rather than elsewhere.

I do find it curious people generally support this tax but grown upon care home fees though. They are basically the same thing after all.

Gavin83

Daisy-Belle wrote: »

Rather than taxing estates inheritance should be taxed as income for the recipients. This would mean those who were already wealthy paid lots as they would already be paying the highest rate of tax on their own income. Those who had little would not pay much especially if any inheritance was divided among more beneficiaries. Grandparents may then divide their estate between their grandchildren or great grandchildren rather than their already well off children

Then you'd just get people leaving their estate to children to avoid tax, at which point the parents would just cash it in as the property was actually for them after all.

stevemcol

Whenever a question is asked about whether or not to reduce a tax burden in a certain area, it should also ask where that tax burden or spending cut should be transferred to instead. Otherwise the question is incomplete. So for example get rid of inheritance tax and replace with a general VAT increase, or reduce defence spending etc.

It's human nature to just say 'get rid of the tax'.

But yes, I would set inheritance tax at a very low threshold and quite high percentage. It would encourage offspring to make their own way in the world.