Is Inheritance tax an unjust tax...?
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C_Mababejive
Posts: 11,654 Forumite
in Cutting tax
More and more i think IHT is one of those things that can sneak up on people.
I've not searched for any data but im fairly certain that more and more people are being caught in the dragnet of IHT, mainly due to the house price bubble.
Someone unexpectedly dies and wham,,the relatives suddenly find they have a big fat bill.
And for what ? Because HM Government think it right to pick the pockets of a cadaver.
Who invented this tax anyway? Are we not free and should be not the creators of wealth benefit from it and/or distribute it as they see fit?
I've not searched for any data but im fairly certain that more and more people are being caught in the dragnet of IHT, mainly due to the house price bubble.
Someone unexpectedly dies and wham,,the relatives suddenly find they have a big fat bill.
And for what ? Because HM Government think it right to pick the pockets of a cadaver.
Who invented this tax anyway? Are we not free and should be not the creators of wealth benefit from it and/or distribute it as they see fit?
Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
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......the relatives suddenly find they have a big fat bill.
Hardly. The executors of the estate will have dealt with any tax before the estate is distributed.
Inheritance Tax has been around for a long time but there are legal ways to help mitigate that tax provided action is taken in good time.
Each individual has a nil rate band allowance as well as an allowance for their residence. If a married couple have made Wills passing their individual assets to the other, the the survivor may have an allowance of £1 Million before tax.
Many other actions can be taken to avoid more tax, but you need to study or take advice to get the benefit of such actions. After all, whatever is raised in taxes helps to support others in many ways. Without it, you may find that income taxes would rise more quickly, particularly in certain people were elected.
SamI'm a retired IFA who specialised for many years in Inheritance Tax, Wills and Trusts. I cannot offer advice now, but my comments here and on Legal Beagles as Sam101 are just meant to be helpful. Do ask questions from the Members who are here to help.0 -
I do think that Inheritance Tax is fundamentally wrong; we are taxed from the moment we are born, we are taxed when we earn money, when we spend money, and when we save money; I think that when we die, the government should allow our relatives to keep whatever money we have (legally) been able to amass and not tax it further.The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.0
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I do think that Inheritance Tax is fundamentally wrong; we are taxed from the moment we are born, we are taxed when we earn money, when we spend money, and when we save money; I think that when we die, the government should allow our relatives to keep whatever money we have (legally) been able to amass and not tax it further.
We had to get married just so we could carry on living in the same house if one of us died.
I pity friends or family that cannot get married in these circumstances.0 -
I agree there is a lot wrong with inheritance tax. I think it should be like this:
0% first £1m
100% on the rest
No exemptions, including the Royal family. This would, in time, deliver a society in which hard work and ability are the only ways to get rich. There are lots of people from rich baackgrounds who go to Eton or similar, then Oxford or similar, then into some top job their contacts have set up for them. Then the rest of us find out what clowns they are, as soon as the going gets tough they want to go back to mummy.
In politics Cameron and Johnson are the obvious recent examples, but every industry has these sorts of guys who know they can just fall back on daddy's millions if they can't hack the real world.Hideous Muddles from Right Charlies0 -
I do think that Inheritance Tax is fundamentally wrong; we are taxed from the moment we are born, we are taxed when we earn money, when we spend money, and when we save money; I think that when we die, the government should allow our relatives to keep whatever money we have (legally) been able to amass and not tax it further.
I could not disagree more. The reason most people’s estate is over there nil rate bands is because of house price inflation and having received inheritances themselves (that is the only reason our estates currently fall into IHT territor. None of this has been previously taxed has required hard labour to acquire.
Why should one persons wealth obtained through gainfull employment be taxed and another who has done nothing more than be the child of rich parents obtain theirs tax free.
Our children could inherit £1M tax free, and if there is anything above that they still get to keep 60% of it so they are hardly going to be hard done by. Anyway if you leave too much, you have not spent or given awy enough in your lifetime, so the tax bill is entirely your fault.0 -
In my view IHT is an excellent tax. Given that tax has to be paid, surely it is better for you that it is paid after you have died rather than whilst still alive. Unlike income tax and NI, IHT taxes earned and unearned wealth equally.
If I was chancellor I would decrease the tax on earned income and increase IHT by reducing the tax free allowances.0 -
I was really questioning its absolute validity as a tax. Its just simple robbery isnt it? Surely one of the best ways to avoid giving it to HMRC is to have a good chunk of managed debt in your portfolio. A form of gearing,just like ITs and other vehicles use.Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..0
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C_Mababejive wrote: »I was really questioning its absolute validity as a tax. Its just simple robbery isnt it? Surely one of the best ways to avoid giving it to HMRC is to have a good chunk of managed debt in your portfolio. A form of gearing,just like ITs and other vehicles use.
You could say that about any tax, but at least with IHT there is plenty of things you can do to minimise it if you act before it’s too late.
Assuming the tax revenue is still required to pay for stuff, do you suggest picks up the tab to replace this tax on the wealthy?0 -
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.Hideous Muddles from Right Charlies0 -
1/2 million people die each year <25k 5% pay IHT most of the revenue comes from the £1m+ estates.
The numbers have been going up, it dipped under3% from nearly 4% when the transferable NRB was introduced the RNRB should see a pause.
It is very easy for most to mitigate with small amounts of planning.
Wealth taxes have serious problems when collected from the living.
Especialy for those where income is low and the asset is a property they live in.
Would wealth held in ISA and pensions be included?
Do you tax the wealth when it is held as a business employing people?0
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