Should inheritance tax be scrapped?

chidsta

Ha! I say get rid of this tax completely! Its horrid when you hear about (not exactly wealthy) families that have lived in the same family home for decades and decades being kicked out when the parents pass away just so they can pay off the IHT debt. I've heard some pretty horrible stories over the years. £325k is really nothing (my little house in Greater-Greater London (zone 6) alone is worth more than that now!) so at least raise it to 2 or 3M to help out the middle class and below..
Then the uber ultra mega deluxe rich who own properties in the UK can pay IHT on their UK based assets. So this will hit the wealthy foreigners (like Oligarchs) who have decided to live here.

Scarpacci

I do not think inheritance tax should be scrapped. Personally, I would ensure the threshold is high enough that most people's homes do not attract IHT and then I would raise the tax rate. I do not think such a transfer of assets, of wealth, should go untaxed except where there's a good reason for it to be. For lower and middle income families, I think it is reasonable to allow that wealth (generally just a house) to be passed on as it's really the only way such a family could ever have any chance of holding their own against the rich who, inheritance tax or not, manage to accumulate wealth generation after generation.

If IHT is only preventing the lower and middle income families from accumulating some wealth, while the rich still move further ahead, it's not progressive at all. I understand the arguments that IHT could be used to help the poor, but it is not a significant tax in the grand scheme of things and dragging more people into it will only bring ever decreasing gains. I don't think there's all that much scope to use IHT to help the poor - but IHT, used rightly, might just help lower and middle income families stand their ground.

The argument it has already been taxed just does not make sense. We pay lots of tax with money that has already been taxed. Not just VAT - council tax and duties, etc. all come from income already taxed. We pay tax on interest that comes from money already taxed and on gains made with money that had been taxed. We pay tax on the interest on the taxed interest of taxed money!

In short, a transfer of assets like this should be taxed, so I start at the position "Why shouldn't it be taxed?" rather than "Why should it?". I think there is enough reason to support having a reasonably high threshold but working harder so the rich can't escape it. Passing wealth on untaxed certainly isn't a right, but the government rightly see that there are often thresholds where taxes should not be applied.

webwiz

I would like to see a smaller state with lower taxes all round. But we will always need some taxes and IHT is surely the least painful tax. It is in a sense voluntary because you can always spend your money before you die and if you want to leave it to your kids they will be getting an unearned windfall. Surely it is better to tax that than to tax their wages. BTW if I die tonight my estate will pay IHT.

Li0nhead

I am a bit of a hypocrite with this issue.

I strongly believe people should not have any advantage due to being part of the lucky sperm club in life chances but I also believe we should not tax the dead. Therefore I think it needs to be scrapped despite that going against all my normal moral standpoints.

Mishomeister

I think an Inheritance tax needs to be 100% excepti in the circumstances where the inheritor can prove the yhave acontributed in to accumulation of the wealth.

I do not agree with the point saying that dead should not be taxed. It is not he dead that are getting taxed but the inheritors.
The dead do not exist any more, so how can you tax someone who doesn't exist?

Ran

Governments need tax (sadly far more than they should), but some taxes discourage enterprise (like personal income tax) while other taxes don't discourage people from working to the same degree. Inheritance tax doesn't dissuade people from working so it doesn't stifle growth - so raise it and lower other anti-growth taxes in return. And if you have a big estate then spend the money and help the economy if you don't want it to go to the government!

Bevanarama

Does nobody see that scrapping it will ramp up the new housing bubble? After all a house can be triple the price without IHT applied under the conservative plans because a 2nd or even third or fourth property in some areas would suddenly become a lot more valuable as something to pass down to kids.

Yet another thing stoking up a market that already locks out the hard working have-nots while benefiting the skiving haves.

The next generation who don't have wealthy parents will end up paying the equivalent of the IHT scrapped. EG the burden of the greedy hoarding upper middle classes will be felt by the lower paid. It is surprising to think people can even believe that social mobility can exist in this country.

Ted_Bloke

cepheus wrote: »

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)

Give over. After people have been taxed on their earned income, taxed directly and indirectly via inflation on their savings what is left over you want to grab as well and you accuse others of greed!

I think IHT is bad politics and bad economics but that could be a matter of opinion - what gets me about ppl like you is you are even moralising and giving yourselves morally superior airs about this theft.

Bevanarama

Ted_Bloke wrote: »

Give over. After people have been taxed on their earned income, taxed directly and indirectly via inflation on their savings what is left over you want to grab as well and you accuse others of greed!

I think IHT is bad politics and bad economics but that could be a matter of opinion - what gets me about ppl like you is you are even moralising and giving yourselves morally superior airs about this theft.

Sorry but I need to burst this bubble. Inflation yes does depreciate savings but it is not a tax. Inflation pushes up the price of governing the country also.

How is IHT theft? If you stand to inherit a sum of money, unless you actually contributed in the wealth generation of your benefactor, what actually entitles you to the privilege of a free ride to wealth? Its funny that there is a skiver v striver rhetoric in play by Osborne, when the hand me downs and trust fund babies who coast through life into decent jobs are actually given more incentives to let their children skive. That, nepotism and relative poverty are the two biggest contributors to the fact that there isn't much hope for those born with nothing. Forget education and aspiration it takes a very very very special poor person to get from the very bottom to the top but if you are mediocre and rich you can end up as prime minister.

XRAT

If I were able to scrap a tax burden, it would be all tax on the public sector bodies. What is the point in taxing the emergency services etc. they generate no profits, their only income is from the taxpayer so ultimately we pay more tax, for them to pay tax back into the colander that is HMRC.