Inheritance tax and inheritance law aren't the same thing. Who legally inherits is largely determined by a person's will and then there are legal norms if someone dies intestate. In most countries the government would only inherit your assets if you dies intestate AND no relatives of any sort could be located.
Inheritance Tax
- Thread starter TheReligion
- Start date
I'll just do some very quick math from this: https://news.sky.com/story/inherita...-rich-who-benefit-from-its-abolition-12969642
From 2020-2021: 27 000 estates brought in £5.76b of revenue. The average estate therefore paid £213 333. Tax rate is 40 %, so the average estate that paid inhetirance tax was valued at £533 333. This is after deductions, so on average an estate paying inheritence tax from a married couple including a home is worth £1 533 333. If the estate is a single parent and includes a home, then £1 033 333.
I don't know how the distribution looks, but inheritance tax is either typically paid by millionaires, or the average is skewed by the ultra rich dragging it up. Neither of those scenarios scream middle England to me.
Tell that to @Stanley Road
He probably paid income tax as well, yet that wouldn't be very strong support for claiming that income tax is unfair revenue benefitting the very wealthy and being paid for by the middle.
I don't consider someone with an estate of £2m "ultra rich" personally. Don't get me wrong they're probably doing fine but there are degrees to it all. It's by no means ridiculous to think that somebody who wasn't all that wealthy could be passing on a £1.5m house (in London) to their kids that they bought decades ago for a lot less. The kids would then have to find the inheritance tax money or sell it which isn't the worst thing in the world as probably they can afford £200k or so, but it could become a mighty big mortgage if they're not in the first flush and there's no spare cash.
RedCafe's solution to growing inequality seems to be lower taxes. That's a bold strategy.
Not at all, income taxes, or indeed any tax should, target the truly wealthy and make corporations pay their fair share, rather than often pay zero tax with legal domicile and accounting shenanigans. Targeting the wealthy enough to buy a roof over your head but doing feck all to tax those further up the economic tree is my problem. Of course victimising those even further down is an even bigger problem. All part of the top end of town's plan to keep everyone else down to enrich themselves.
On a personal level I am getting a tax cut in the middle of this year. I voted against it despite personally wanting more $ so that perhaps I can retire before I die without having to live in relative poverty and at the mercy of the rental market. If I could then pass on enough so my son had at least some hope of ever owning a home then that would be good as well, because the property market will remain fecked well after I'm gone.
Surely the answer is to close the loopholes for the richest, rather than go the opposite way?
We’ve already established how easy it is to pass on anything under £500k for a single parent or £1 million for a married couple. That’s an huge amount of wealth. I think you’re really underestimating the types of people who are inheriting over that.
There’s arguments about not being forced to sell the family home but it seems like a bit of a red herring to me. I can’t see that working often where there is more than one recipient of the inheritance, unless they have the money to buy out the other person. You have the option of paying tax with any cash that’s been left with the estate. You can sell your own property, which you likely have if your parents have over £1 million in housing.
I personally don’t even know anyone who has an ambition to live in the house they grew up in. My mum and aunty have said they’d rather live anywhere else than move into house that they watched my grandad slowly die in.
It is not 1 billion. It is billions. Plural. And to your other point, it is 0.3% of GDP but 0.7% of yearly Government income. Not the same thing.
Bringing up the Queen as a defence is not a defence. I would demolish the monarchy tomorrow and hang, draw and quarter the lot of them. I'd close loopholes for IHT, CGT and PAYE and introduce some kind of wealth tax.
I'd still keep inheritance tax though. And I'd keep it despite the fact my kids will be paying it. They'll be getting it on top of all the advantages I've given them in life already, all the things I've already paid for, and will still pay for all of the less discernible advantages we've already given them. And despite all of this, they will still get 1 million, totally tax free, to do with as they wish.
Live in it or sell it, I don't care but further taxing owner occupied property is a terrible idea. Investment property fair enough as you (should) be allowed the same tax advantages of any other investment when you are alive (negative gearing/tax write deductions) but CGT takes care of that.
And I'd love to have inherited my folks house if I was in the UK, and if they hadn't sold it and frittered what little money that it was worth away in heir later dementia riddled years. They were always shit with money sadly and they could have had a much better retirement if they had retained their property. Since they didn't they had no equity to afford a decent care home when their marbles rolled and could only just afford rent and food before that.
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I meant to type 7 billon. Nothing compared to the tax that wealthy individuals and corporations get away without paying, and presumably some, probably a large proportion, of that 7 billion would be collected from the super rich as it would involve individuals who owned multiple investment properties that would till be subject to CGT. You could get more than that back simply by cracking down on tax fraud more severely.
Bizarre that it is the right of politics that is most in love with Inheritance Tax. I wonder why that is?
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The property market will be fecked as long as we let inequality grow. Rich people have nothing to spend their remaining money on but assets, with housing being one of them. That increases the prices for everyone else as well.
How? I'm not talking about going around seizing property willy nilly in a revolution (though would be good to redistribute some of that aristocratic land in exactly this way), I'm talking about what already happens right now in this country of rule of law?
I don't know what happens exactly in divorces to be honest.
Ultra rich maybe not, but it's not middle England. We're talking about a country where the median annual income for full-time employees is £35k
This has nothing to do with the conversation. The logical extension of what you're arguing is to abolish all tax entirely, seeing as corporations and the queen avoid them. Which I imagine is not what you're arguing?
I don't recognise the characterisation of the last paragraph either or where you've come up with it. The main people I know who are against IHT tend to be socially conservative or individualistic in their approaches to life. Or increasingly people who ostensibly are 'left wing' but will be affected personally by it.
Whats the median average house out of interest?
Approximately 290k.
Around £300k. £500k for London.
strikes me a lot as a group of slightly worse off people trying to drag down a group of slightly better off people, creating an even bigger wealth divide, rather than joining up and tackling the major reasons why we’re all down here fighting any way.
i’ve personal experience of losing a parent suddenly and having to sell up the only family home, which three of four people called their main residence, whilst paying for a brother to be at uni, and supporting a mum who had never worked, just to cover a tax bill and wait for probate to be sorted. coupled with a stressful job and all the admin, all that sorting that meant i never actually had any time to grieve properly, and started to despise my dad for putting me through it all. it cost me personally well over 30 grand that i’d worked hard for before then. a sum i didn’t feel comfortable asking to be covered by the rest of the family who were in a place where they needed every penny they could get. eventually my
portion of the money came through, and it got me to point where it’s given me maybe an 8 year leg up and brings retirement 8 years closer. it does not feel worth all the stress that came with it.
i’ve long done a job i hate, in a sector i find boring, just because it pays well enough and offers the kind of security of being able to afford to give my own kids a reasonable standard of living in the area i’m bringing them up in. it’s the sacrifice i make to get by. when i’m on my death bed, seriously contemplating whether or not it’s all been worth it, the only thing i’ll know was worth it will be my kids. and the last thing i want for them is for them to have the same kind of worries i had, whilst the tax man rubs his hands, thinking there’s another opportunity to bum the husk of a man he took everything from already.
i’ve personal experience of losing a parent suddenly and having to sell up the only family home, which three of four people called their main residence, whilst paying for a brother to be at uni, and supporting a mum who had never worked, just to cover a tax bill and wait for probate to be sorted. coupled with a stressful job and all the admin, all that sorting that meant i never actually had any time to grieve properly, and started to despise my dad for putting me through it all. it cost me personally well over 30 grand that i’d worked hard for before then. a sum i didn’t feel comfortable asking to be covered by the rest of the family who were in a place where they needed every penny they could get. eventually my
portion of the money came through, and it got me to point where it’s given me maybe an 8 year leg up and brings retirement 8 years closer. it does not feel worth all the stress that came with it.
i’ve long done a job i hate, in a sector i find boring, just because it pays well enough and offers the kind of security of being able to afford to give my own kids a reasonable standard of living in the area i’m bringing them up in. it’s the sacrifice i make to get by. when i’m on my death bed, seriously contemplating whether or not it’s all been worth it, the only thing i’ll know was worth it will be my kids. and the last thing i want for them is for them to have the same kind of worries i had, whilst the tax man rubs his hands, thinking there’s another opportunity to bum the husk of a man he took everything from already.
WHO ARE YOU AND WHAT HAVE YOU DONE WITH THE REAL RIMALDO?!
Seriously though, what a huge burden for someone so early in life but sounds like you did your old man proud.
That in no way logically follows. The logic is that tax should be fair. Inheritance tax isn't fair because the fair parts of it are covered by CGT, which why it has been abolished in so many countries like Australia and Canada.
And I only ever see the right arguing against abolishing it despite it seemingly be a more lefty thing. Possibly as a red herring to help them pretend they care about fairness. Maybe.
Agreed. Except no way will the tax office take anal sex in payment.
Income and wealth are not the same thing though due to property prices having skyrocketed over the last few decades.
It's 5x the average home price, mortgage free.
Right, which quite a lot of old people have because they bought it for a lot less than that. They tend to be the ones that people inherit from of course.
Sorry to hear that. I have friends who went through similar ordeals. There’s no question that it makes the shittest period of life significantly shitter, for anyone who gets a big inheritance tax bill. And that’s my main issue. It also causes people approaching the end of life a lot of anxiety as they become aware of the hassle and stress they’ll be leaving behind. So again, making a horrible part of life that little bit more horrible.
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It is very far from normal for old people to own a mortgage free home worth £1.5m. In the year 2020-2021, 3.73 % of the deaths resulted in inheritence tax, and a substantial portion of those were worth less.
I’d like to point out that the threshold in Ireland is €335k, with 33% tax payable on any inheritance above that. You Brits have it easy!
Richer people paying their fair share, how terrible!
Well it shows how much inheritance tax the actually wealthy are paying then doesn't it? Duke of Westminster springs to mind.
And how much money the wealthiest are hoarding
Can relate to a lot of this down to the anger of not being able to grieve because of being knee deep in legalese, craven family members feuding and all the other shite you simply shouldn't have to be dealing with at such a time.
No, those particular numbers say nothing at all about that.
Kids dont get it these days mate, there's probably a thread somewhere moaning about not being able to get on the property ladder, my 80k tax could have helped one of them out but now it's gone to a better cause, that cause will probably be 1 man digging a hole in the road and 10 others watching while the road is closed for weeks, who needs a house anyway?
This is why POA is so important, my brother was prepared to do this a few weeks before he died but wasn't in the right mind set to be considered sane by a solicitor, plus it takes months. i'd have moved some assets around so that the declaration to the tax office at time of death would have been blow the taxable amount. So any parent with assets should consider going down this route while they are still young or risk giving to the lovely Mr Sunak
Interesting definition of “rich”
They absolutely do. The duke of Westminster left £10,000m to his nephew (I think it was). Inheritance tax value being is it 40% of that so £4000m. I think he paid £4m if I remember rightly. Skews the figures a bit that sort of thing.
If you're talking about that specific instance, then that was not included in the 2020-21 numbers for obvious reasons. For ultra rich generally, they have approximately zero impact on the fact that less than 4 % of deaths result in inheritance tax, or that an even much lower amount of deaths leave behind homes worth more than 1.5m.
You wouldn't be dealing with any of that if inheritance tax was 100 %.
it was over a decade ago now and it set me up well to deal with worse since. he grew up on a farm. he managed to get himself into a grammar school but was dragged out of it to support his mum and dad and younger brothers, who were then able to go to decent schools as a result, so it always felt like it was just something you did when you had to.
he started his own business, had to work hard for everything he got and earned every penny of what he made. yeah, he got lucky with house prices, but that luck is being paid for by everyone who’s had to get on the property ladder since, and it’s nothing no one else benefited from in exactly the same way during his life time. his inheritance just bumped me one house along the journey i was otherwise on any way. i got in to a potential forever family home in my early 30s instead of late 30s. that’s it.
it didn’t make anything easy, just a bit easier. so it’s a bit rich to read all those who think “oh it’s 350k, that makes you super wealthy any way.” it doesn’t, not round here anyway. it just helps a little bit, after a load of stress. good thing i did it though, as all the country’s problems were resolved by my stress and his years and years of effort. it’s deeply comforting to know that the relatively few people who have to go through it were the tipping point for all being right in the world that makes it all worthwhile. especially if it meant charlie and wills and the likes didn’t need to sell one of their castles to pay for lizz’s passing.