More evidence of increasing wealth gap

CLAPTON

cells wrote: »

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541725/IHTNationalStatisticsCommentary.pdf

UK inheritance statistics 2013/14

£288,000 was the average net value of estates that required grant of representation. 267,549 estates issued a grant of representation

So each year about 267,000 people leave an estate of which the average value is £288,000

That is no small number. Over a Generation (30 years) that works out to over 8 million such estates. So each generation >8 million significant estates are passed down. Bear in mind most estates will gift to more than one person eg parents leaving an estate to their two kids so you are looking at multiple times this 8 million estates being received. That turns to at least 16-20 million individuals who benefit from significant estates each generation. And unless this individual is a single person and has no family then even more people benefit. As I keep saying its a very broad very significant economic consideration that most people simply do not think about and take into consideration

there is no reason to suppose that the majority of the people that receive this largess are in their 30s and wanting to buy a property

it may well explain the increase in holiday homes etc or world cruises

mrginge

cells wrote: »

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541725/IHTNationalStatisticsCommentary.pdf

UK inheritance statistics 2013/14

£288,000 was the average net value of estates that required grant of representation. 267,549 estates issued a grant of representation

So each year about 267,000 people leave an estate of which the average value is £288,000

That is no small number. Over a Generation (30 years) that works out to over 8 million such estates. So each generation >8 million significant estates are passed down. Bear in mind most estates will gift to more than one person eg parents leaving an estate to their two kids so you are looking at multiple times this 8 million estates being received. That turns to at least 16-20 million individuals who benefit from significant estates each generation. And unless this individual is a single person and has no family then even more people benefit. As I keep saying its a very broad very significant economic consideration that most people simply do not think about and take into consideration

The data you quote is in relation to inheritance tax.
Inheritance tax is not paid by the vast majority of estates.

If you'd carried on reading the summary you would see -

The 267,549 estates issued a grant of representation in 2013-14 account for approximately 47% of all deaths in that year. Of these estates, 19,277 were liable to inheritance tax. Approximately 3.4% of all deaths in 2013-14 led to an IHT charge. This figure is higher than the 3.1% of deaths which led to an IHT charge in 2012-13 or the 2.9% of deaths that led to an IHT charge in 2011-12, although lower than the percentage of deaths resulting in an IHT charge in the period before 2009-10.

So the number you quote represents less than half of all deaths. It does not count low value estates. And, from above *ALL* inheritance tax is paid by just 3.4% of the total number of deaths.

Using an average number in the way you have is ridiculous. How can it be sensible when only 3.4% of estates are above the iht threshold?
Lets be clear here - 96.6% of deaths are below IHT.
If that's not a clear indication of a massive skew then what is?

If you wish to back up your conclusions with supporting data, you may wish to find some data that doesn't actually discredit them even more.

cells

CLAPTON wrote: »

there is no reason to suppose that the majority of the people that receive this largess are in their 30s and wanting to buy a property

it may well explain the increase in holiday homes etc or world cruises

well at least we are getting somewhere lets agree to at least the following

~£200 billion a year is transferred from older people to younger people

This is a very significant large number that needs to be taken into account

That the distribution is very broad directly benefiting around 20 million households each generation.



Yes its quite possible that most, but not all, of this money lands in the hands of the 40-60 year olds rather than the 30 year olds. This does not mean the current 30 year olds get nothing it means they will be getting significant sums when they themselves go towards that age range. Whats more the savings rate is positive and inheritances and gifts are growing so the 30 year old of today will get a bigger inheritance in 20 years time than the current 50 year olds are getting. Im not fully sure how to account for this for instance you cant access your pension savings but they are your savings and your wealth in some ways you can argue a future inheritance is similar so should that be included in an analysis of what 30 year olds 'own'?

cells

mrginge wrote: »

The data you quote is in relation to inheritance tax.
Inheritance tax is not paid by the vast majority of estates.

If you'd carried on reading the summary you would see -



So the number you quote represents less than half of all deaths. It does not count low value estates. And, from above *ALL* inheritance tax is paid by just 3.4% of the total number of deaths.

Using an average number in the way you have is ridiculous. How can it be sensible when only 3.4% of estates are above the iht threshold?
Lets be clear here - 96.6% of deaths are below IHT.
If that's not a clear indication of a massive skew then what is?

If you wish to back up your conclusions with supporting data, you may wish to find some data that doesn't actually discredit them even more.

your going to have to explain yourself, the link says quite clearly the number of inheritances over the £5k band and the average sums. I quoted that I did not quote your BS above.

And you dont need to have an estate over the IHT band to pass it on. If you have £300k you dont get taxed but that still passes on

Overall the paper says ~267,000 estates (over £5k) are passed on and the average of them is ~£288,000. Multiply by 30 to get an idea of generational wealth transfer

CLAPTON

cells wrote: »

well at least we are getting somewhere lets agree to at least the following

~£200 billion a year is transferred from older people to younger people

This is a very significant large number that needs to be taken into account

That the distribution is very broad directly benefiting around 20 million households each generation.



Yes its quite possible that most, but not all, of this money lands in the hands of the 40-60 year olds rather than the 30 year olds. This does not mean the current 30 year olds get nothing it means they will be getting significant sums when they themselves go towards that age range. Whats more the savings rate is positive and inheritances and gifts are growing so the 30 year old of today will get a bigger inheritance in 20 years time than the current 50 year olds are getting. Im not fully sure how to account for this for instance you cant access your pension savings but they are your savings and your wealth in some ways you can argue a future inheritance is similar so should that be included in an analysis of what 30 year olds 'own'?

it has little relevance to people around 30 buying property
but by and large I believe all wealth is past on to other (usually younger) people

cells

CLAPTON wrote: »

it has little relevance to people around 30 buying property

why?

If you are 30 and your 60 year old parents just inherited £280k are you more or less likely to get support/gifts from your own parents?

Lots of people get gifts and inheritances despite the people on this thread trying very hard to dismiss it as oh not that important and negligible

ukcarper

CLAPTON wrote: »

it has little relevance to people around 30 buying property
but by and large I believe all wealth is past on to other (usually younger) people

Have to agree with you for a change.

cells

Here is a breakdown of what people leave as inheritances bear in mind most estates are left to multiple people not just to one person. Also bear in mind this data is a few years old and the figures are likely a good deal higher today

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541407/Table_12-3.pdf


It shows roughly for 2013-14

2,300 estates of over £2m left
6,000 estates of £1m-£2m left
22,000 estates of £500k to £1m
55,000 estates of £300k to £500k
43,000 estates of £200k to £300k
72,000 estates of £100k to £200k
35,000 estates of £50k to £100k
26,000 estates of £10k to £50k

That is over 200,000 estates leaving at least £100k

multiply the above by 30 to get an idea of the numbers leaving estates per generation and once more these are old figures the new ones will be a good deal higher!

So we have ~6 million estates per generation leaving at least £100k (its more likely ~6 million estates per generation leaving at least £150k for the current year)

Are people still going to try to dismiss this as a side note not worth considering. its the elephant in the room

mrginge

cells wrote: »

your going to have to explain yourself, the link says quite clearly the number of inheritances over the £5k band and the average sums. I quoted that I did not quote your BS above.

And you dont need to have an estate over the IHT band to pass it on. If you have £300k you dont get taxed but that still passes on

Overall the paper says ~267,000 estates (over £5k) are passed on and the average of them is ~£288,000. Multiply by 30 to get an idea of generational wealth transfer

Once again, the numbers you are using represent a subset of the population and do nothing to disprove wealth inequality.

By definition, if the average wealth of 267k estates is 288k, but only 19k of those are sufficiently above the average to fall into IHT territory of 325k+, then they skew they produce must be so enormous that the average becomes a worthless number.

cells

mrginge wrote: »

Once again, the numbers you are using represent a subset of the population and do nothing to disprove wealth inequality.

By definition, if the average wealth of 267k estates is 288k, but only 19k of those are sufficiently above the average to fall into IHT territory of 325k+, then they skew they produce must be so enormous that the average becomes a worthless number.

see my post above, 6 million estates of >£100k (likely >£150k with updated info for this year) are left each generation.

You dont think 6 million estates of at least £100k is significant? You dont think 6 million estates is a broad spread? That money will be going to at least 12 million people as most estates leave to 2 or more people. That is 12 million households and each household has ~2.4 people in it so ....