Introduce Land Tax or similar reform so super rich can't avoid Inheritance Tax

[Hagar]

Consider this.

Owner dies
Tax assessed
New owner cannot raise tax in cash
Land defaults to the government
Government then becomes freeholder of significant chunks of the UK.
This requires a large civil service to manage, or the government then conducts land sales to the highest bidder, not Joe Public who does not have enough cash. They could not split down into tiny parcels, be too expensive.
Result new landowner probably at a reduced price enough to cover outstanding tax.
Then
Owner dies
Tax assessed
New owner cannot ............

Or the government becomes the single largest landowner/freeholder in the country. Kind of a slow motion land grab.

 

[Zethor]

What they're inheriting has usually been taxed already. Why should they pay double tax? Because they're rich and you're not?

It's not a double tax. If you inherit something, you essentially have a new income so it makes perfect sense to pay a tax for it, like everyone else. You can't consider it a double tax just because your parents paid their own taxes. By that logic you can go back to the time of Richard the Lionheart and claim you have already been taxed hundreds of times.

 

[dowie]

What's the point in discussing a hypothetical which is nowhere near realistic?

to illustrate a principle that might be less obvious otherwise

But anyway, don't leaseholders have the right to extend the lease for a fair price? Then leaseholders when it comes to houses can buy the freeholder out, no? It's not as though freeholders can do what they want/charge what they want... both sides are reasonably protected by the law, no? It'd be unreasonable for the freeholder to shaft the leaseholder, but it'd be similarly unreasonable for the leaseholder to shaft the freeholder.

Yes, in most circumstances - but that isn't particularly relevant to the point.

 

[dowie]

The super rich would still avoid paying. Middle and lower classes would probably still end up getting stung somehow.

Someone else mentioned this yet is seems to be an empty criticism if you're not able to indicate how they'd do so?

 

[ttaskmaster]

Would you change your view if, for example, all of the capital was owned by a few trusts set up for the benefit of a few heirs and no one could buy any freehold property as a result? How about if we went further and all of the country got consumed by them (obviously this is an extreme and unrealistic example)?

Sounds fine to me - I won't ever earn enough to buy anything anyway.

However, land just sits there not doing anything. Buildings just sit there doing nothing. Both need maintenance, which costs money, which the owner makes in renting it out, which is what gives someone like me a roof over my head.

It's not a double tax. If you inherit something, you essentially have a new income so it makes perfect sense to pay a tax for it, like everyone else.

An inheritance is something you get given when someone dies... essentially a gift.
So my wife inherited a 1.4 Corsa when grandad died - What tax should she pay on that?

Is this just for things you get given when someone dies, you're talking about, or should it apply to all gifts since those are an income too?
Nana gave her £20 for her birthday - What's the tax on that?

Does ALL income of every kind need to be income-taxed, then?
I found 20p on the floor today - What's the tax I should be declaring on that?

You can't consider it a double tax just because your parents paid their own taxes.

Actually, that's exactly what it is. They earned that money. They paid income tax on it. It is now theirs to do what they like with it.
Why should it be taxed just because they locked it up for a bit and then gave it, rather than giving it on a monthly basis?
Not like it really increases in value either. If anything, it's worth less now and you want to take even more of it with inheritance tax?

I don't have/never had an inheritance and won't get anything when the last of my relatives finally karks it, but I still believe the whole inheritance tax thing is ridiculous.

 

[flowrider99]

https://petition.parliament.uk/petitions/165011

Please vote lets see if we can get the required amount of signatures.

How about you just improve your own lot rather than trying to penalise those that already have. What is it with people always wanting to punish people better off than themselves just get on with your own life.

 

[dowie]

Actually, that's exactly what it is. They earned that money. They paid income tax on it. It is now theirs to do what they like with it.
Why should it be taxed just because they locked it up for a bit and then gave it, rather than giving it on a monthly basis?

Because that is how society functions/how government is funded. Income is taxed as it is earned, 'stuff'/assets taxed as it transferred, sold etc..

you're paying a tax when you buy things from a shop... and that shop is paying a tax on the profits... and from those profits, when they pay their workers, they'll pay a tax on the income... and then when they buy things they'll pay another tax and so on...

you'll pay tax if you buy something outside the EU and you'll pay duty/tax when you bring it to the UK...

we have a generous exemption for IHT and this means, for example, that ordinary people aren't kicked out of the family home etc.. when both parents die etc..

but the fact tax is paid beyond that... on money, assets... that tax has been paid on previously isn't something strange or different or drastically unfair...

 

[ttaskmaster]

Because that is how society functions/how government is funded. Income is taxed as it is earned, 'stuff'/assets taxed as it transferred, sold etc..

So how much tax does my wife owe for that Corsa, then?
How much tax will my mate owe when I give him his birthday present?
It's all income, right?

but the fact tax is paid beyond that... on money, assets... that tax has been paid on previously isn't something strange or different or drastically unfair...

Actually it is unfair and very strange, precisely because that tax isn't applied to everything, as per my examples above.

 

[gjrc]

politics of jealousy.

brilliant.



currently at 146 signatures. Parliament will be debating this one!

 

[Basher]

It's not a double tax. If you inherit something, you essentially have a new income so it makes perfect sense to pay a tax for it, like everyone else. You can't consider it a double tax just because your parents paid their own taxes. By that logic you can go back to the time of Richard the Lionheart and claim you have already been taxed hundreds of times.

I'm not sure I understand your parallel with Richard the Lionheart. The point here is why should gifts given as part of death be treated any differently than other gifts given?

 

[dowie]

So how much tax does my wife owe for that Corsa, then?
How much tax will my mate owe when I give him his birthday present?
It's all income, right?

Probably nothing and none of it is income either. Income is taxed beyond the tax free allowance (though irrelevant here), IHT has a threshold which I've mentioned already in my previous post.

 

[lude1962]

https://petition.parliament.uk/petitions/165011

Please vote lets see if we can get the required amount of signatures.

Typical labour/socialist claptrap, steal from the rich to give to the bone idle workshy (most of the so called working class should call themselves doleclass).

Families work hard all their life to provide for their kids and grandkids, likewise their children.
Then along comes some socialist numpty whose family never passed on any wealth (piised it up or gambled it away is the usual causes) and wants too bring everyone down to their level due to jealousy.

 

[johnloo]

**** that.
Government already tales our hard earned money by force, I won't vote to give them the power to take any thing else.

It would do away with council tax, so if you rent the landlord will pay, I don't think you understand how beneficial it is for the working man.

 

[Zethor]

I'm not sure I understand your parallel with Richard the Lionheart. The point here is why should gifts given as part of death be treated any differently than other gifts given?

Because it's not a gift, it's an inheritance.

 

[johnloo]

How about you just improve your own lot rather than trying to penalise those that already have. What is it with people always wanting to punish people better off than themselves just get on with your own life.

The people that are punished are those that work hard on average wages that pay their taxs in full an cant afford discretionary trusts etc...

 

[johnloo]

Typical labour/socialist claptrap, steal from the rich to give to the bone idle workshy (most of the so called working class should call themselves doleclass).

Families work hard all their life to provide for their kids and grandkids, likewise their children.
Then along comes some socialist numpty whose family never passed on any wealth (piised it up or gambled it away is the usual causes) and wants too bring everyone down to their level due to jealousy.

The system now steal's from the poor to give to the rich, you need to read up on this idea. It would mean land would be used more productively, more efficiently, tax would be reduce for those that actually work. People would not want to hold land that is not productive, increasing affordability for all.

 

[Amp34]

It's not a double tax. If you inherit something, you essentially have a new income so it makes perfect sense to pay a tax for it, like everyone else. You can't consider it a double tax just because your parents paid their own taxes. By that logic you can go back to the time of Richard the Lionheart and claim you have already been taxed hundreds of times.

"Inheritance" tax is a double (or more) tax. You are taxed when you receive the money, quite possibly when you buy the asset, and then when you die the government slap another 40% tax on your assets.

The Inheritee isn't taxed at all on that asset., otherwise someone on £5k a year receiving £10k from a £1m estate would pay a different rate of tax as someone on £1m a year receiving the rest of the estate.

Unless of course you are a proponent of a flat tax system, in which case it's still not "fair", but at least it's fairer than most taxes (such as income tax).

 

[Bunka]

**** that.
Government already tales our hard earned money by force, I won't vote to give them the power to take any thing else.

Exactly, we have enough taxes as it is.

 

[dlite]

Typical labour/socialist claptrap, steal from the rich to give to the bone idle workshy (most of the so called working class should call themselves doleclass).

Families work hard all their life to provide for their kids and grandkids, likewise their children.
Then along comes some socialist numpty whose family never passed on any wealth (piised it up or gambled it away is the usual causes) and wants too bring everyone down to their level due to jealousy.

No, exact opposite.

Property / land taxation is widely held as the "best tax" by "right wing" economists. Have a look at this for example, where Milton Friedman tells his views regarding best taxes.

https://www.youtube.com/watch?v=yS7Jb58hcsc

UK is a bit odd country in this regards, because conservatism here has it's root on toryism which was generally on the side of landed gentry and LVT is branded as being "socialist" even though it is by far the least harmful tax to economy and common people.

Again: I advocate changing taxes so that those who work and live in a housing which they can afford with their work, will be unaffected.

This also describes the benefits of LVT:
http://www.economist.com/blogs/economist-explains/2014/11/economist-explains-0

 

[McPhee]

Typical labour/socialist claptrap, steal from the rich to give to the bone idle workshy (most of the so called working class should call themselves doleclass).

Families work hard all their life to provide for their kids and grandkids, likewise their children.
Then along comes some socialist numpty whose family never passed on any wealth (piised it up or gambled it away is the usual causes) and wants too bring everyone down to their level due to jealousy.

Um... isn't this the exact problem? If you have the right parents you can slob about your whole life knowing you'll want for nothing while contributing little to society. Introducing heavy taxes on inherited wealth is another way of saying "Everyone on their own merit". The wealthy still have an advantage - potentially better education, more freedom, flowing capital with which to start an adult life. Those born in to wealth simply have to work towards creating their own wealth in adulthood.

It would also likely have a somewhat stimulating effect on the economy - if inherited wealth is heavily taxed, why keep as much of it back?

I'm set to inherit a decent haul, I'm no socialist, and TBH I'm quite curious about the idea. It levels the playing field somewhat, and the money generated could be used to good effect. The idea of using any increased tax haul to improve state education is quite appealing.