Inheritance Tax

[TheReligion]

Should it be abolished?

Talk of it at the Tory conference and the topic always divides opinion.

At a time when people are going to struggle to get on the housing ladder, can barely pay their bills and afford the basic essentials, should they been taxed on what they inherit?

On the flip side should the extremely wealthy be able to pass this on from generation to generation without taxation making it a lottery as to who your parents are as to how comfortable you live?

 

[Solius]

I'd abolish it.

Has a wealthy heir ever struggled because of it? Probably not. It barely makes a dent.

I just don't like it on principle. That money was (hopefully) already earned and taxed no? So it;s being taxed again just because someone wants to pass it on to their children?

 

[Abizzz]

People always talk about this as if life wasn't a lottery anyways. Somehow you're allowed to inherit 100% of genetic defects, dysfunctional family problems etc. Additionally for 325k you can inherit a mansion in some parts but not even a decent flat in others...

 

[Revan]

Tax it for the rich (when the value is above a million or so), and don’t tax for the others.

 

[Rado_N]

I wouldn’t abolish it but I’d dramatically increase the NRB.

 

[lynchie]

Drop the allowance to £50k and tax the hell out of the rest. People should make productive use of their wealth while they're alive, and their children should make their own way.

 

[The Corinthian]

To be honest, there tends to be a lot more reliefs, and...for want of a better word, 'loopholes' with inheritance tax then there tend to be for other taxes. So there are legitimate ways in reducing your tax burden. The thing with UK tax legislation, it was written ages ago, so it is pretty archaic and not fit for purpose on where we are currently as a society.

But yes, I'd drastically change how it's done. An incremental wealth tax is what we should be pushing for.

 

[hodgey123]

I'd replace it with some form of wealth tax. I am a tax advisor and rich people are not afraid of Inheritance Tax given there are so many ways of reducing or completely eliminating your tax bill to the extent you actually sit and plan it out. It is also worth remembering that the vast majority of people do not actually pay Inheritance Tax given the size of the NRB and the fact you can benefit from your spouse's unused portions as well if they die before you.

 

[Drainy]

Keep it, increase the rate and the allowance and decrease VAT

 

[Frosty]

You can give a tax free gift to someone already, as long as you live for another 7 years.

We have an unhealthy obsession with taxing income and not taxing wealth as it is.

 

[2 man midfield]

It’s the biggest con ever conceived.

 

[moses]

I'd abolish it.

Has a wealthy heir ever struggled because of it? Probably not. It barely makes a dent.

I just don't like it on principle. That money was (hopefully) already earned and taxed no? So it;s being taxed again just because someone wants to pass it on to their children?

No, the whole point is to put some sort of dent in generational wealth.

@Frosty is right, taxing a tiny income and ignoring vasts tracts of wealth is nuts.

 

[sullydnl]

I would think that in most countries there's an argument for making more use of a progressive inheritance tax, not abolishing it. I'm not sure why the UK would be any different, bar a love among some of your politicians for doing everything possible to maintain dynastic wealth.

If anything you should be giving it more teeth and look for ways to make it more difficult to plan around.

 

[Buster15]

Should it be abolished?

Talk of it at the Tory conference and the topic always divides opinion.

At a time when people are going to struggle to get on the housing ladder, can barely pay their bills and afford the basic essentials, should they been taxed on what they inherit?

On the flip side should the extremely wealthy be able to pass this on from generation to generation without taxation making it a lottery as to who your parents are as to how comfortable you live?

The worst thing about IHT is that it is charged at 40%, irrespective of whether the deceased person paid 40%, 20% or paid invoice tax at all.
And when you consider the increase in house prices, that is likely to form a significant part of the estate.
A couple qualify for £325 nil rate each which is transferrable, so £650. And when their main residence is taken into account, the nil rate is £1m. Sounds a lot but house prices can take a huge chunk of that.

 

[marktan]

The worst thing about IHT is that it is charged at 40%, irrespective of whether the deceased person paid 40%, 20% or paid invoice tax at all.
And when you consider the increase in house prices, that is likely to form a significant part of the estate.
A couple qualify for £325 nil rate each which is transferrable, so £650. And when their main residence is taken into account, the nil rate is £1m. Sounds a lot but house prices can take a huge chunk of that.

Which is a good thing, no? If anything it'll help dampen the ridiculous, unproductive and unearned rise in house prices we've seen over the last 15 years.

 

[rimaldo]

i’d like to see a single residence being exempt from it, as well as your auto enrolled employment pension. forward the majority of people will have their money tied up in both with not much floating around otherwise.

 

[RaddyRed]

Getting rid of a tax that brings in billions each year could potentially give them another backlash, spooking markets again that they are going to have to increase borrowing.

I would guess (you never know with this govt) that they won't be wanting to do anything too radical in the short term a d rock the boat.

You could debate all day about whether it's a fair tax or not.

 

[RaddyRed]

i’d like to see a single residence being exempt from it, as well as your auto enrolled employment pension. forward the majority of people will have their money tied up in both with not much floating around otherwise.

Pensions are exempt from IHT anyway.

 

[Zlatattack]

100% abolish it. I don't stand to recieve any inheritance, I doubt my children will be lucky enough to get very much (other than the home we live in).

Anything I manage to save before I go, i will have earnt and paid tax on, we shouldn't be taxed on transfering it.

I 100% support a wealth tax instead. I already pay the islamic equivalent (2.5% zakat). I think a wealth tax is much more useful.

 

[Pogue Mahone]

I get the point of it from a wealth distribution point of view but I always think it’s grim that one of the first issues for many grieving people to deal with is a massive tax bill and/or urgently selling the home they grew up in.

 

[Skills]

No. Increase the tax free allowance though to 500k though.

 

[Fully Fledged]

Should it be abolished?

Talk of it at the Tory conference and the topic always divides opinion.

At a time when people are going to struggle to get on the housing ladder, can barely pay their bills and afford the basic essentials, should they been taxed on what they inherit?

On the flip side should the extremely wealthy be able to pass this on from generation to generation without taxation making it a lottery as to who your parents are as to how comfortable you live?

People who are struggling to get on the housing ladder haven't been left more than £325K+ in Inheritance. Simple as. If you have £325K you can buy a decent house most places apart from London for cash. The threshold goes up to £500K if it's a house that you are leaving your kids or grandkids.

 

[sun_tzu]

Getting rid of a tax that brings in billions each year could potentially give them another backlash, spooking markets again that they are going to have to increase borrowing.

I would guess (you never know with this govt) that they won't be wanting to do anything too radical in the short term a d rock the boat.

You could debate all day about whether it's a fair tax or not.

i think 6 billion last year which in the current climate (and with no doubt big tax cuts to find) seems the wring thing at the wrong time

longer term abolish it but in the shorter term I think id rather see IHT stay as it is than say 6 billion off education

 

[groovyalbert]

wealth tax, yes. Inheritance tax on money that's already been taxed at a time when families are grieving? Seems pretty vindictive.

 

[RaddyRed]

100% abolish it. I don't stand to recieve any inheritance, I doubt my children will be lucky enough to get very much (other than the home we live in).

Anything I manage to save before I go, i will have earnt and paid tax on, we shouldn't be taxed on transfering it.

I 100% support a wealth tax instead. I already pay the islamic equivalent (2.5% zakat). I think a wealth tax is much more useful.

A married couple have 650k nil rate band and 350k home residence band (as long as being passed to kids and grandkids) so under current rules on 2nd death of a spouse you need to have over 1 million in assets before the 40% tax kicks in (including the property).

Pensions also don't form part of the calculation.

Handing over just a property to kids won't attract any tax unless you over the total allowance.

 

[Ady87]

I won't be inheriting anything to be taxed so don't feel strongly one way or the other but it would be nice if my Son could keep all or a larger chunk of what I hope to leave him.

 

[golden_blunder]

Drop the allowance to £50k and tax the hell out of the rest. People should make productive use of their wealth while they're alive, and their children should make their own way.

I don’t think that’s fair. Many parents work their ass off to ensure that their kids get a better start than they did

 

[lynchie]

I don’t think that’s fair. Many parents work their ass off to ensure that their kids get a better start than they did

They do, because we have a system whereby your prospects are massively influenced by your parents' wealth. If you take steps to dismantle that system, there's less incentive to need to set your kids up for life, and you can make better use of your earnings.

 

[arnie_ni]

I get the point of it from a wealth distribution point of view but I always think it’s grim that one of the first issues for many grieving people to deal with is a massive tax bill and/or urgently selling the home they grew up in.

Agreed. There needs to be a better mechanism to get taxes of the wealthy. I don't agree with IHT at all

 

[arnie_ni]

They do, because we have a system whereby your prospects are massively influenced by your parents' wealth. If you take steps to dismantle that system, there's less incentive to need to set your kids up for life, and you can make better use of your earnings.

What better use of your earnings than making sure your kids are OK after you die?

 

[NotThatSoph]

I'd abolish it.

Has a wealthy heir ever struggled because of it? Probably not. It barely makes a dent.

I just don't like it on principle. That money was (hopefully) already earned and taxed no? So it;s being taxed again just because someone wants to pass it on to their children?

I've never understood the already taxed point, or double taxation. All income and wealth is already taxed multiple times: corporations pay multiple taxes before paying out income, then people pay income tax, then you pay VAT when you spend your money, maybe a sugar or CO2 tax, a wealth tax if you have enough and you're in a country that does that. On the issue of taxation, surely it's your tax burden that matters rather than the number of taxes?

On the subject of inheritance tax I'm pretty sympathetic to the Piketty analysis of economic growth and increasing inequality due to a shift in the share of income of capital vs labour, and on the subject of fairness and equality of opportunity it's hard to think of more extreme head starts in life.

 

[Volumiza]

Drop the allowance to £50k and tax the hell out of the rest. People should make productive use of their wealth while they're alive, and their children should make their own way.

Do you have kids?

 

[arnie_ni]

I would think that in most countries there's an argument for making more use of a progressive inheritance tax, not abolishing it. I'm not sure why the UK would be any different, bar a love among some of your politicians for doing everything possible to maintain dynastic wealth.

If anything you should be giving it more teeth and look for ways to make it more difficult to plan around.

I think the wealthy person in question needs to be taxed on their wealth when they are alive not the current system in place

 

[lynchie]

What better use of your earnings than making sure your kids are OK after you die?

Enjoying your time with your kids while you're alive? Taking more time off work? Investing in the community you live in? Do all that, and you'll likely set your kids up for life pretty well anyway - much more so than just passing on a bunch of free money.

 

[lynchie]

Do you have kids?

Yes, two of them. Doesn't make my view any more or less valid though.

 

[Buster15]

Which is a good thing, no? If anything it'll help dampen the ridiculous, unproductive and unearned rise in house prices we've seen over the last 15 years.

IHT is paid by the deceased family. Not the people who are buying a house.
So it has little or no effect on house prices.

 

[2 man midfield]

I get the point of it from a wealth distribution point of view but I always think it’s grim that one of the first issues for many grieving people to deal with is a massive tax bill and/or urgently selling the home they grew up in.

Yep, which then goes back to the bank and they get to mortgage it out to another poor sucker for 25 years. It’s a racket. If you own it you should be able to give it away.

 

[P-Ro]

I don't like how it works in terms of if you are very wealthy you can essentially put the majority of your assets into trusts and there's no IHT to pay because it doesn't make up part of your estate on death.

For the average Joe who's main asset is their house, you can't just gift it to your kids and there's no IHT to pay (unless you move out or pay the owner market rate rent). If you're rich you can.

 

[mitChley]

Enjoying your time with your kids while you're alive? Taking more time off work? Investing in the community you live in? Do all that, and you'll likely set your kids up for life pretty well anyway - much more so than just passing on a bunch of free money.

Spot on

 

[Volumiza]

Yes, two of them. Doesn't make my view any more or less valid though.

No it doesn't but it's not a view, as a parent of two, I can easily understand. Instinctively I want my kids to enjoy a better life than I've had, or do better than I have. I'm not rich and have also worked hard for everything I have and paid tax on it all and want to give every penny of what's left to my kids on my death. Anything other than that feels like fecking robbery.