Poll: Poll: Inheritance tax

Inheritence Tax?

  • Scrap inheritance tax and increase stealth taxes

    Votes: 19 8.7%

  • Scrap inheritance tax and add it to fuel

    Votes: 20 9.2%

  • Scrap inheritance tax, day dream and get the government to cut expenditure

    Votes: 129 59.2%

  • Accept the government needs the money and keep inheritance tax

    Votes: 50 22.9%
  • Total voters
    218

Glaucus

Glaucus

Glaucus

Man of Honour
Joined
11 Mar 2004
Posts
76,637
Please could a mod make this into a poll

1) Scrap Inheritance tax and increase stealth taxes
2) scrap inheritance tax and add it to fuel
3) Scrap inheritance tax, day dream and get the government to cut expenditure
4) accept the government needs the money and keep inheritance tax

I'm half watching the inheritance tax program and everyone's going how evil it is, but what the solution, we all know government wont cut expenditure so we will just get taxed else where.

What do you guys think the solution is?
 
Since I haven't and will not inherit anything from anyone I personally don't give a monkeys. Inheritance tax is just another drawback of out of control house price inflation. People want their houses to double in value every 5 years and then whine when they get hammered by the Labour Government that let it get this way.

On a morale note I believe it is wrong to take 40% of what a person leaves to others.
 
Third Opinion said:
On a morale note I believe it is wrong to take 40% of what a person leaves to others.
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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.
 
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I wouldnt say scrap it but 40% takes the ****, especially on money that has been taxed as its was earned, taxed as it is saved etc..

It wouldnt be such an issue if the threshold had risen with inflation and/or in relation to the things it affects the most (houses mainly) but its gotten to the point where its not just affecting the 'rich' that it was originally incepted to affect - it is now affecting people who have worked their butts off, have had some luck (and tbh been taxed up the wazoo) and just want to leave their family with something to make their lives easier once they are gone
 
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.
 
Dist said:
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.
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yes you can do that but you have to own it for at least 6 years before they die.
 
still though, its not a bad way to get around the inheritence tax, but with the unpredictability of death it would be difficult to make sure the house is yours in writing for at least 7 years, since some1 could go through with this idea then the pearent could unexpectidly die <7 years later.
 
As far as I'm aware the government doesn't really make that much cash out of inheritance tax in the grand scheme of things.

Jokester
 
Jokester said:
As far as I'm aware the government doesn't really make that much cash out of inheritance tax in the grand scheme of things.

Jokester
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IHT raises very little money for the Government compared to other taxes. The most recent figures available are for 2004-5 (from Table C8 of the 2006 Financial Statement and Budget Report), and show that the various taxes, duties and levies raised the following (in £billions):

Income tax (gross of tax credits) 127.2
National insurance contributions 78.1
Value added tax 73.0
Corporation tax 34.1
Petroleum revenue tax 1.3
Fuel duties 23.3
Capital gains tax 2.3
Inheritance tax 2.9
Stamp duties 9.0
Tobacco duties 8.1
Spirits duties 2.4
Wine duties 2.2
Beer and cider duties 3.3
Betting and gaming duties 1.4
Air passenger duty 0.9
Insurance premium tax 2.4
Landfill tax 0.7
Climate change levy 0.8
Aggregates levy 0.3
Customs duties and levies 2.2

So it raises only 2.9 billion per year. it's one of the most expensive taxes to collect as well - only CGT and IT cost more to administer (see table 1, Annex F to the HMRC Annual Report 2004-5).

The big four taxes - IT, NI, CT and VAT, raised 108 times the amount IHT raised.
 
"Scrap inheritance tax, day dream and get the government to cut expenditure" :)

Maybe they can stop paying knocked-up teenagers so much, or maybe I should stop typing while I day dream.
 
What is grossly unfair, in my view, is charging large sums of money on the family home, which may force someone out of the only home they've ever known because they can't pay the tax bill.

This could be solved (for most people) either by bringing IHT thresholds into line with where they were 20 years ago with respect to average house prices, or by exempting principal private residences with a market value of less than £x .... where £x was, say, £1.5 million, or similar.
 
Dist said:
still though, its not a bad way to get around the inheritence tax, but with the unpredictability of death it would be difficult to make sure the house is yours in writing for at least 7 years, since some1 could go through with this idea then the pearent could unexpectidly die <7 years later.
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Well, within the 7 years, a sliding scale applies, so the closer to 7 years ago the gift was, the larger the exemption.

But the real problem is losing control of your own house. Suppose I give my house to my kids to avoid IHT, then fall out with them, or one of them desperately needs money to pay a gambling debt, or whatever. I could end uo getting booted out of what was my own house, just in order to try to avoid IHT.

It's a method of reducing/avoiding IHT, buit it has problems.

Another method is for parents to separate their interest in their house, so that they can each dispose of 50% of the value according to their own will. At least that way, you get £570,000 of exemption, not £285,000.
 
They managed for years without stealing 40% of families life long saved money they sure as hell can go back to controlling their spending better.
 
I'd like to see either the lower threshhold raised to something like £0.5m, or maybe an allowance made for a first home. Either would take the average family out of the tax completely. For those that remain, there are ways and means to avoid such things (legally).
 
I find it interesting how people perception of IHT has changed over the last few years. When IHT was just considered a tax on the wealthiest no one really cared about, it seems to me that as more and more people are being caught by it has captured public attention.

My problem with IHT is that it taxes the unwise; the rich generally avoid IHT using loop holes and trusts. With the exception of sudden death they're really is no reason for an individual not to plan for IHT and therefore avoid paying it or insure against the payment of it.

As previously posted the raises in house prices in recent years have placed a larger number of estates within the IHT threshold, being that in most cases a house is the largest asset and in some the only asset of estates it would seem to be wise that the IHT threshold be linked to house prices - however this would still leave people falling foul as some house' would no doubt fall about the threshold.

The best thing you can do should you be concerned about IHT is seek independent advice from a financial advisor.

As to whether the government should scrap IHT what would you rather they taxed instead? Or perhaps and income from IHT should be taxed as a capital gain? I don't see either of these as a solution personally I'd rather the government focused it attention on stopping fraud particularly on benefits.
 
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