Is Inheritance tax an unjust tax...?

chrismac1

Yes, 100% of all worldwide assets would be included. All deaths on UK soil, and deaths abroad of UK passport holders, would potentially fall within the charge to the tax. No exceptions.


Personally I quite fancy a timeshare week in Balmoral once King Charles flogs that to pay for the 775 rooms in Buckingham Palace, assuming he wants to keep that.

getmore4less

chrismac1 wrote: »

I think we've reached a place where we need to tax assets and sales, not income so much.


Too many large corporations like Amazon and wealthy individuals like Abramovich just run rings around the current system.


Inheritance tax like the one I have suggested would only be avoidable if you were willing not to have a property here. For example, suppose 25 year old Egbert is found to be living in a £25m mansion which previously belonged to his dad Quentin, who died last year leaving no other assets and with no inheritance tax declared. The state sends Egbert a bill for £24m, if he doesn't pay HMRC just moves in, flogs the property and sends Egbert his £1m if there is enough left over to pay him it.


Likewise Amazon will be taxed on every sale it makes to a UK- domiciled customer. Don't want to pay, Amazon? Fine, just don't bother selling anything here then.

Do you really mean UK domicile that include a lot of people that live outside the UK.

We already have a sales tax it's called Vat.

Jo blogs owned a hotel worth £5m employing 50 people what happens to that under the new tax regime.

chrismac1

Nothing much happens to it until Joe Blogs dies.

kidmugsy

Should be:-

(i) Only first £50k is exempt from IHT.
(ii) Various avoidance dodges squashed.
(iii) IHT tax rate set to 10% except for
(iv) Property abroad which will be taxed at 100%.

Seems fair, no?

getmore4less

chrismac1 wrote: »

Nothing much happens to it until Joe Blogs dies.

Then what?

getmore4less

kidmugsy wrote: »

Should be:-

(i) Only first £50k is exempt from IHT.
(ii) Various avoidance dodges squashed.
(iii) IHT tax rate set to 10% except for
(iv) Property abroad which will be taxed at 100%.

Seems fair, no?

(ii)
The first to go would have to be spouse exemption, that is one that could be used a lot more to protect assets from IHT, currently it costs billions in missed IHT.

The next would have to all the gift exemptions they are the simplest dodge for most people, has to be for life not just 7 years, buy your mate a pint it counts in your estate for the rest of your life.
If people earn more than they need they should not be able to give it away to avoid tax it needs to be compulsory to save it.

A lot of wealth stores are in assets that only have high values as wealth stores there intrinsic value is very low, they so become worth less in some cases very little, as soon as you try to tax them.

Going to be very popular with the families with a couple of young kids living in a where one of their parents(breadwinner) dies and they remaining family are left with a big tax bill.

Might as well close that charity dodge as well.

chrismac1

Then Joe Bloggs' inheritors can either pay the tax or not. If they can they run the hotel. If not they flog it - or the state does in the event they don't - and if it is a viable business, you'd expect the new owners to carry on running it.


I reckon that within 100 years of this 100% tax rate the big estates which just pass down the generations would be much more widely spread. I can't imagine that the Duke of Westminster, for example, would own half of central London unless he just happened to invent the next Iphone.

Spidernick

getmore4less wrote: »

(ii)
The first to go would have to be spouse exemption, that is one that could be used a lot more to protect assets from IHT, currently it costs billions in missed IHT.

That would often leave a little old lady (or man, i.e. the surviving spouse) having to sell the family home and move out to pay an IHT bill and so is a political non-starter (could you imagine the headlines in the Mail?!).

antrobus

chrismac1 wrote: »

....
I reckon that within 100 years of this 100% tax rate the big estates which just pass down the generations would be much more widely spread. I can't imagine that the Duke of Westminster, for example, would own half of central London unless he just happened to invent the next Iphone.

The Grovesnors are smarter than you. They pass their assets down to the youngest generation before they die. That and trusts. They never got over losing Pimlico.

The easiest way of avoiding IHT is to give your assets away before you die. Or move abroad and acquire a new domicile. Which is what everybody worth more than sixpence is going to do, faced with a 100% IHT rate.

chrismac1

See my early post concerning Egbert and Quentin. If Egbert suddenly appears on Land Registry with £100m of property, HMRC sends him a bill for £99m.


So all these fancy schemes are dead in the water.


Likewise EVERY bit of land and property at the Land Registry is prima facie taxable, it is up to the owners to show they are not due to pay any tax on transfers.


Slam dunk. The perfect tax. You can't escape it if you own property. It would raise maybe £50bn per year, based on the current £5bn we raise with really tame rules. So suddenly we can more or less forget about the deficit, we can stop worrying about the lack of social mobility and the growing income inequality between the richest 10% - of which I am one - and the rest.


Lots of problems solved in one hit, what is not to like about that?