Inheritance tax - new idea

Inheritance_tax

Dear Sir or Madam,

Just an idea of mine to make IHT fairer.

1 Each person to be given an IHT tax credit of a certain value at say 18 years of age [everyone over 18 years old would have to be given one now to start the process off]. Let’s say £300,000 to start the discussion.
2 This credit should be transferable at death or before death[ say between partners or to children] or sellable – to anyone.
3 Rich people could buy them up to a limit - say 10 of them, to avoid death duties.
4 The poor people could sell them on a market set up specifically for this process so that it could be regulated and recorded.
5 A tax credit of £300.000 saves £120,000 so the market value may reach say £60,000.
6 This scheme would help re distribute wealth between the very rich and the poor people.
7 It would mean that a person could leave their IHT credit to their spouse and, if necessary could be left to their children etc
8 The very rich would still have to pay some IHT but the poor or young people could benefit from the sale. A young couple could use the amount to get them on the housing market for example

This idea obviously needs developing, I’m sure that there will be plenty of problems to solve but this is just an idea at the moment.

I suspect that the treasury would loose money on the figures shown but the benefits to young and the poor far outweigh this. The treasury could tax each financial transaction [payable by the buyer] to offset this.

Please pass this idea on to Mr Alistaire Darling or his department and to the Labour / Government think tank.

I would appreciate some feedback from the tax experts if possible.


Regards,

John Grayson