Poll: Poll: Inheritance tax

[iSam]

Any way the government can make money it will, including taking dead peoples beloved inheritance. ********.

 

[woodsy2k]

Inheritance tax is a complete scam imo. How can they justify taking someones money when they die that should rightfully go to the people in the persons' will. disgusting imo.

 

[Vonhelmet]

i thought there are ways around inheritence tax, for example, say its your parents for example and they want to leave you their house when they die. before they die, cant they sell you the house (for free, although there will be costs and such for paperwork). then you let them continue to live in the house as if it was still their own. that way when they do die there will be no inheritence tax since the house is in your name anyway.

unless im missing something this way would seem to mean a lot less money paid to taxes.

Also, if you sell someone something for free, or give it as a gift, then the gain can be charged at market value.

 

[trojan698]

You get taxed for your entire life and even when you die, it's just wrong imo. But the op says, they'd just have to make up elsewhere so it's probably better to keep it than raising taxes and hence reduce the money you can spend when you're alive.

 

[Berserker]

Any way the government can make money it will, including taking dead peoples beloved inheritance. ********.

A point of pedantry. The dead don't inherit, their estate does. You also can't tax a dead person - they're dead and have no need for money.

I'm in two minds about this. I have no objection to rich people getting taxed, but they're also the most likely people to be able to avoid IHT in the first place. It is also effectively a double tax, but then so is VAT.

I think that getting the majority of average house owning families out of IHT as previously posted would be good. Beyond that, I'm going to sit squarely on the fence.

 

[locutus12]

i believe perhaps there should be a system to claim back a percentage of inheritence tax based on the inheritors yearly earnings and savings.

 

[Deadly Ferret]

It is actually, what a person gain as a gift due to death of another.

If it is a death tax then every penny that person have when he/she died would be taxed. However, if said person choose to donate every penny to charity or create a trust with that money. ZERO % will be taxed.

Only when said money is given to another person, the person recieving it will be taxed. It is a tax on a gain, not a tax on the dead.

It's rather crude classing a bequest as a gift, and rather callous to tax it.

 

[PikeyPriest]

Not sure if the laws have been tightened on them recently, but trusts are also a nice way of getting around inheritance tax.

I think the government need to learn that they should do the best job on a limited public budget. Raising expenditure is the easiest way to look like you are improving things, but without any changes in end service its meaningless.

 

[PsiFox]

i thought there are ways around inheritence tax, for example, say its your parents for example and they want to leave you their house when they die. before they die, cant they sell you the house (for free, although there will be costs and such for paperwork). then you let them continue to live in the house as if it was still their own. that way when they do die there will be no inheritence tax since the house is in your name anyway.

unless im missing something this way would seem to mean a lot less money paid to taxes.

Gordon has plans to introduce a series of taxes to cut the loopholes (as he sees them), out.

This will include an "instant " tax on a gift of money over a certain amount.

 

[Von Luck]

The main objection to IHT seems to be greed. People like getting something for nothing. I have no problem with IHT remaining as it is. At most, I would support moves to exempt the primary residence of the deceased from IHT..

 

[Dolph]

The main objection to IHT seems to be greed. People like getting something for nothing. I have no problem with IHT remaining as it is. At most, I would support moves to exempt the primary residence of the deceased from IHT..

I can imagine your opinion would change pretty fast if it was actually affecting you...

Picture this situation, imagine you live at home, and your parents house is worth £500k (not unrealistic in many parts of the country). Both your parents get killed in a car crash on the way home one night.

You are left the estate, but by the time the various expenses/debts are taken out, all that's left is the house.

How are you going to pay the inheritance tax to keep living in the property you've lived in all your life?

 

[Rich_L]

Sell the house? Presumably without parents the house would likely be far in excess of what you actually need, so downgrade to a smaller place and have tons of cash left over, even after IHT.

Alternatively if you are set on staying in the house, take out a loan for the IHT amount secured against the capital of the house?

Not that complicated is it?

 

[Dolph]

Sell the house? Take out a loan for the IHT amount secured against the capital of the house?

Not that complicated is it?

So, at a time of bereavement, you should be forced to sell the family home?

And technically speaking, you can't secure a loan for IHT against the house, because until you pay the IHT, the house is not yours

 

[dirtydog]

It is actually, what a person gain as a gift due to death of another.

If it is a death tax then every penny that person have when he/she died would be taxed. However, if said person choose to donate every penny to charity or create a trust with that money. ZERO % will be taxed.

Only when said money is given to another person, the person recieving it will be taxed. It is a tax on a gain, not a tax on the dead.

As I've said every time this comes up but Dolph won't have it

I support IHT fully.

 

[dirtydog]

I can imagine your opinion would change pretty fast if it was actually affecting you...

Don't assume that everyone's morals are driven by greed and that their principles go out the window in exchange for money, even if you fall into that category

 

[Dolph]

As I've said every time this comes up but Dolph won't have it

I support IHT fully.

I won't have it because it's not true.

The estate and the executor are liable for the IHT, not the person recieving the money, anyone who says otherwise is incorrect.

The person recieving the money being liable for IHT only applies if that person is also the executor of the estate, unless the will is really simply written (ie no specific bequests), and even then it's sketchy.

If I have two sons, Bob and Joe, and I leave Bob the house and make Joe the executor of the estate, Bob isn't liable for the tax, the remainder of the estate, via Joe is.

 

[chesterstu]

Who cares really unless thier family is worth millions. They can happily take a percentage of the huge debt my parents will leave behind for me to inherit

 

[dirtydog]

But what IHT is not, is a death tax. Although IHT opponents like to call it that as it is an emotive term and helps win supporters for their case based on emotion rather than fact.

 

[Dolph]

I'm going to quote Geoff's explaination from another thread, because it's better than one I could put together (hope you don't mind Geoff)

Those aren't the only three scenarios, that isn't the "only case", and yes, you're missing something.

As I said, and have repeated, "specific bequests".


Estate £610k.
Debts £10K
Estate after debts £600k.


IHT Threshold £285k.
Estate subject to tax £315k.

IHT @ 40% (of £315k) = 126K

Estate available for distribution = £600k - £126k = £474k.



Now we get to the will (and note that the tax has been sorted before the terms of distribution in the will have any effect, which is WHY it's a tax on the estate, not the beneficiaries), which defines how that is distributed.

Suppose it says :-

"1) Geoff gets £500,000,

2) Fred, George and Samtheman share equally in the remainder.


What will happen?

Geoff's bequest is specific, and ALL specific bequests are settled in full before any distribution of the remainder (residual) occurs. The remainder is what's left after that.

So, there's £474k left after tax, and Geoff gets £500k. Well, there isn't £500k. So Geoff will get the £474k, and the other three get an equal share of the remainder, i.e. one third of nothing.

Of course, if it wasn't for that £126k of tax, the remainder after I get the £500k would be £100k, and you'd get a third of it.

Explain again how it's a tax on the recipent rather than on the dead...

 

[Dolph]

Don't assume that everyone's morals are driven by greed and that their principles go out the window in exchange for money, even if you fall into that category

I've always been strongly against inheritance tax

I've just had to deal with it far more directly than I would have liked recently... Which has only compounded how unfair I've always felt it is.