Why should we have to pay inheritance tax?

[Richdog]

Just watched the news, and there was an article about a labour MP wanting inheritance tax abolished. I think this would be severely welcomed... obviously it's lucrative for the government, bringing approximately 3-6bn to their coffers each year... but why the hell should I have to just hand over a whopping 40% of the money that my father or mother have laboured their entire lives to leave me? In my opinion it's one of the biggest frauds ever conceived, and thinking that I will one day have to pay it makes my blood boil.

Has anyone suffered this yet? Got any tips for legally minimising the eventual damage this will cause me?

 

[Richdog]

<Devil's advocate>

On the other hand, isn't there something slightly obscene in people aquiring wealth without having to work for it. Would it not be better to have such undeserved wealth spread across the entire population, rather than just building up and up with a monied few?

Obscene? Goodness grief of course not, this is the money your parent have saved to ensure you have the best life you possibly can... money to finance a good education for your children etc it's not as though the average person is going to receive millions is it? It's perfectly natural and I see no reason why we should have to be penalised for being sensible enough for providing for our children and grandchildren.

Definitions of obscene on the Web:

*designed to incite to indecency or lust; "the dance often becomes flagrantly obscene"- Margaret Mead

*abhorrent: offensive to the mind; "an abhorrent deed"; "the obscene massacre at Wounded Knee"; "morally repugnant customs"; "repulsive behavior"; "the most repulsive character in recent novels"

*lewd: suggestive of or tending to moral looseness; "lewd whisperings of a dirty old man"; "an indecent gesture"; "obscene telephone calls"; "salacious limericks" wordnet.princeton.edu/perl/webwn

Inheritance tax fits in there somewhere?

 

[Richdog]

It only applies to estates worth more than £285,000 though so a lot of people aren't going to be worried about it.

Our house is worth that now, gone up 60k in 3 years.

Anyone who is affected by it is still going to get a lot of money after tax so I don't see the point of moaning. It isn't as if their parents entire existance was to make their life easier and provide free money, although I'm sure some people see it that way.

What a ludicrous statement, I bet you're the type who doesn't bat an eyelid no matter what the government introduce. Bend over with a smile on your face most likely. "Don't moan because the government takes 40% of your parents hard earned life-savings when they die". My dad is furious about having to pay that tax... by the time he dies I will have a family so will likely need that money for education of my children and to go towards making life better for those I love. No-one said that a parents entire existence is to make life easier and give you free money so that ststement is pointless, but isn't that what we all want for our family... a better life? If not then I would consider you a complete twerp. No point in moaning?

Give me a break... what you should be questioning is whether its fair for your parents to work their entire lives, pay their income tax, concil tax, god-knows-what-else-tax... only then for the government to get a substantial wad of "free money" when they die. That is adding sheer insult to injury in my view.

 

[Richdog]

TBh that money has already been through the tax system when it was earned, I think its mad that the government can tax more money out of it.

Bingo!

 

[Richdog]

Cheers for that Raymond, interesting info there. Id rather that tax be scrapped and raised in other places where it won't affect us as much. Just seems so unfair.

 

[Richdog]

My parents are both retired teachers (so not exactly high earners - not heads or anything) yet their estate is worth probably double the current IHT limit. With the increases in house prices over the last couple of years the number of people affected by IHT has increased massively.

With regard to the "your parents work to support their children" line - tbh that's rot and a very immature attitude to life.

Your parents work to support their children while they are exactly that, children, but when you're an adult, surely you should be expected to stand on your own feet, rather than expecting a cushy handout?

Once you've left home your parents should be working to ensure a comfortable existence for the rest of their lives, not to make sure that their little darlings are kept in Gucci and Prada.

Lets also keep a sense of perspective here, you'll still be getting a BIG bung of money regardless.

No, that's rot. You're essentially saying that it's 'ok' for the government to take 40% simply because as an adult you're "supposed to stand on your own two feet. I don't know about you but the thought of leaving a good sum to my heirs is a nice feeling, and if you aren't bothered by the government taking 40% of what is rightfully your childrens then there must be something seriously wrong with you.

I'll repeat what I have said in two posts now, the money they leave can make your familys life substantially better... whether it be education, home or whatever, the difference you can make for those you love is unimaginable. When we receive the money we will have a ton of responsibility in our lives; debts, mortgages, etc etc. There is no shame in a parent easing that burden for their children as much as possible without comprimising their own quality of life. If you see that as 'wrong' somehow then i'm not sure what to say to you... in fact I find it quite hard to believe that you are ok with 40% (almost half!) of everything you have saved going to the government when you die and your family being left shortchanged, despite you having been taxed for all of your money already during your life. Who do you think needs it most? Simply shocking... there's no other way to describe that attitude.

I think that inheritance tax is completely justified. Someone receiving an enormous windfall from their relatives through no effort of their own should be rightfully taxed on it. I'm afraid I don't feel much sympathy for people forced to sell property worth thousands of pounds that the rest of the world doesn't get in the first place. Think about it from another point of view, as citizens of a country in general, should we really have the right to give our property solely to a particular person when there is such a need for resources in the country generally?

And you! What planet are you on?

 

[Richdog]

While greed is to be applauded?

Greed? Sheesh if that's what you think then I genuinely feel for you... talk about completely missing the point in every conceivable way. The smiley you added afterwards makes it even mroe tragic.

 

[Richdog]

60% of £285,000 is a good sum, even with 3 kids it's £57,000 each. How much free money do you want?

I want the full amount that my father worked his arse off for and that he WANTS me to have. Why the frick would you want 40% of your estate going to the givernment when you've already paid your income tax! Do you think I want 40% of what I earn going to to the government when I die? No, I want to give my fmaily the best opportunities in life, and I damn well expect them to do the same for their children and so on ad infinitum.

If you have to rely on your parents dying to ease your financial burdens then you obviously shouldn't be allowed money in the first place.

What a ridiculous statement, spoken like a complete muppet!

Like I said 60% of anything over £285,000 is still a lot of money and should be lot of help unless you're seriously over your head with debt.

Or unless you want to get that dream home you coulodn't otherwise afford. Or unless you start your own business. Or pay for expensive medical fees/treatment. You must be incredibly short-sighted if you think that the sort of money we're talking about is going to last a lifetime.

Personally I would rather my children be responsible and capable of managing on their own two feet once they become adults than eagerly waiting for me to die so they can receive a wad of money they haven't worked a minute for.

Even with IHT you still get a lot of money, it's just greedy wanting more, a lot of people get nothing or end up paying out when their parents die and they manage to live a normal life.

Another one who completely and tragically misses the point.

 

[Richdog]

Why SHOULD you have to have a smaller house though. Your dad worked hard for a decent house and wants you to have it. Why the hell should it be sold and you move into a smaller house just because it is the right thing to do in giving 40% of it to the government. Your attitude is on a similar line to communism. Spread out all the wealth and everyone is happy. It never works like that.

ECATLY! What if you're house has been in the family for years and years, it has all of your memories and then what... you have to sell it and sacrifice all that just to pay for some bloody tax that you don't feel you should be paying in the first place? Sickening.

 

[Richdog]

This is what bothers me most about any form of inheritence tax. The money originally earned has been taxed, the estate has already been taxed (income used to buy estate is hence ALREADY taxed twice), and now you're going to have to pay ANOTHER tax on it all AGAIN?!?!? WTF? How can this be a good thing?

Now please explain this conept to Von Luck and loopstah, ensuring you make it very clear and very simple. Add pictures if necessary.

so if my dad was a tramp, but used to be a millionaire however i won all his money in a game of poker a year ago...then he died... i'd get taxed on the million i won in an unrelated incident?

That just gave me a proepr lol... best implausible scenario ever. Love it.

However I agree with you, it's hard to believe.

 

[Richdog]

If you take punitive steps to clobber those that have serious wealth, you are clobbering precisely the people that can (and in many cases do) take perfectly legal steps to ensure that the government don't get their greedy, grasping little mitts on much, if indeed any, of it.

For instance, you are seeking to clobber precisely the people that can afford to pay tax accountants to exploit loopholes, or to ensure holdings are owned by offshore companies through nominee shareholders .... or who simply relocate and/or redomicile offshore.

Seq what's your full, unbridled opinion on IHT? I know that theoretically you (or your dear sprogs should I say) could get mutilated by it with the amount you're likely to be worth when you die.

 

[Richdog]

Surely its Labour making sure that people ARENT lazy - that they cant simply rely on sponging of Mom and Dada beyond the grave?

No, THATS a fellacious argument. Who the hell says everyone who gets an inheritance is sponging? You and several other misguided posters in this thread seem under the delusion that everyone who receives their inheritance is a helpless no-hoper isn't going to be able to put the money to good use and actually make peoples lives better. It is the people who work hard and give their kids a good upbringing that are the least likely to be lazy... they will be motivated and driven, and actually be ableto make good use of any money they inherit to further their own goals and ambitions, or just to give their family a better quality of life. Doesn't everyone want that for their kids?

Your view is so short-sighted and narrow-minded I feel sorry for your current or future family if that's how you think of them!

And as for the notion that 'Its already been taxed, why should it be taxed again', well thats just fallacious reasoning. The taxes and dutys we pay on goods, for example are taken out of our earnings that have been taxed, for example.

Rubbish. Many people are taxed 40% of everything we earn up until death. Why should we pay another 40% after death. Where's the logic in that? You want almost half of your hard-earned cash to go straight back to the givernment? More fool you then.

Thank goodness such people like you and Von Luck are in the minority, or I really would fear for my childrens children! The more people bend over and accept things like this, the worse it can only be for society.

 

[Richdog]

Which taxes would you raise to replace IHT?

I would add a little to other taxes that would not affect people in such a significant way! How many other minor taxes could be raised a small amount to cover that 3.5bn? It wouldn't take too much effort to distribute that amount in other places. Raymond Lin has already pointed that out earlier!

No no no no no no no, if the estate goes into charity instead of a windfall on you, it will be tax free. The money is still there isn't there? and not taxed at all.

The money is taxed because got a windfall, it is not a tax because of your parent's death, it is a tax when you are getting it.

PET, Trust fund, assigning property....etc

It's there, use it.

Can you please clarify further there mate?

 

[Richdog]

Simply because I happen to disagree with your opinion does not make me ''misguided', a 'fool' or 'narrow minded'.

I also find your insinuation that I will, in some way, be doing my family a disservice rather insulting.

Insuting or not, thats what I think you're doing.

So you'd tax everyone, rather than the small minority of people who, regardless of IHT will still receive nearly 300k tax free?

Some reading material: http://news.bbc.co.uk/1/hi/uk/5247324.stm

More families pay inheritance tax

There has been a rise in the number of inheritance tax cases
The number of estates in the UK paying inheritance tax rose by 72% in the five years up to 2004, according to a study.
An increase in property prices left about 30,451 estates - most worth less than £500,000 - liable for the tax.

A further 22% rise to 37,000 is expected by 2007, according to Halifax, which carried out the study.

It is calling for the inheritance tax threshold to be raised, saying it would be set at £430,000 if it had increased in line with house price inflation.

The threshold for inheritance tax has risen by 85% since 1996 - but the housing market has grown by 179%.

The threshold is set at £285,000 - but the government intends to further increase it to £325,000 by 2010.

More here: http://www.taxworld.org/iht/what.htm

Inheritance Tax is perhaps the most unfair tax of all as it is charged upon the value of a person’s estate at the time of their death.

In order to accumulate wealth during a person’s lifetime either income tax or capital gains tax would almost certainly have been paid and hence it could be argued that inheritance tax is a double tax charge. It was always intended to be a tax on the wealthy but, due to the sharp increase in house prices, the number of people who would not consider themselves to be in that bracket but who are now caught in the trap is increasing all the time.

Over the last five years alone house price inflation has exceeded the increase in allowances (see links below) by almost four times.

 

[Richdog]

It doesn't answer Visage's question - are you suggesting that in order to recoup the money lost by abolishing IHT, we should increase taxation for the majority, rather than restricting it to the section of society with the greatest wealth?

More duty on cigarettes and alcohol? Two major drains on the NHS through related illness and miss use for example. A small % somewhere else on high revenue taxes could easily cover the 3bn made in IHT. It may even save a lot of families extra grief through stupidly high taxation on a family home they did not even realise was way above the threshold of IHT.

Bingo. Good to see someone using their grey matter.

Luckily for me, the opinion of those lacking in manners matters little to me.

That upper lip must be stiffer than an iron post.

 

[Richdog]

I admire the principle of paying tax according to 'ability to pay' intellectually, but when it comes to depriving my kids of what I want them to have, the tax man can **** right off.

lol, great post with a very succinct conclusion.

Do you think the income tax should be means-tested then, or at least have a fair 'scale' to use as a base for how much people should pay?