Why should we have to pay inheritance tax?

Von Luck · 21 Aug 2006 at 10:47

Jono said:
IHT is a disgrace. I completely agree with anyone who says the same, and for the same reasons.

This country needs to stop celebrating ignorance and rewarding mediocrity. People should have some incentive to work hard.

Surely removing IHT would then discourage the next generation from working hard, as they'd be cushioned by their inheritance?

If anything I would have thought that IHT _increases_ the need to work hard in life - as you can't rely on getting a huge handout?

Even with IHT, you're still going to inherit a large amount - £285k, tax free, then 60% of anything over that amount.

The only real disadvantage I see is that in some cases the family home may need to be sold - this is a shame and I'd support some change in the legislation around putting exclusions in place for the main residence of the deceased.

ArmyofHarmony · 21 Aug 2006 at 10:54

I think the main thing is that tax percentage is so large, 40% is GIANT...thats almost half of what you get.

A scary thought...

Lagmeister · 21 Aug 2006 at 10:57

Dtab said:
If you make a gift,technically you are not allowed to continue to benefit yourself from that gift.ie if you give away your house and continue to live there rent free,you are still benefitting from your gift (£1 rent is asking for trouble,should be nearer market value),although i'm sure he has covered himself better than that.

I dont see why it should matter what rent is charged, its up to the land lord what they want to charge as rent and the government shouldnt be able to do anything, they cant say they havent been paying rent even if it is only 1 quid a month.

Personally though it just tastes of good ol labour trying to give the lazy a better chance to be more lazy, while making sure anyone who does actually work is penalised until and beyond the grave.

Visage · 21 Aug 2006 at 11:02

Lagmeister said:
Personally though it just tastes of good ol labour trying to give the lazy a better chance to be more lazy

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

And as for the notion that 'Its already been taxed, why should it be yaxed 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.

Dtab · 21 Aug 2006 at 11:02

Von Luck said:
Even with IHT, you're still going to inherit a large amount - £285k, tax free, then 60% of anything over that amount.

The only real disadvantage I see is that in some cases the family home may need to be sold - this is a shame and I'd support some change in the legislation around putting exclusions in place for the main residence of the deceased.

I would guess many more homes have to be sold becouse they are left to multiple beneficiaries than becouse if IHT.For e.g. if you are left a £500k house,you would be liable for 40% of £215k = £86k.TBH if you can't get/afford an £86k mortgage on a £500k property,you shouldn't really even consider trying to keep it.

Morba · 21 Aug 2006 at 11:10

Dtab said:
I would guess many more homes have to be sold becouse they are left to multiple beneficiaries than becouse if IHT.For e.g. if you are left a £500k house,you would be liable for 40% of £215k = £86k.TBH if you can't get/afford an £86k mortgage on a £500k property,you shouldn't really even consider trying to keep it.

thats prolly £500 or so, im sure loads of people can suddenly stump up an extra £500 a month....

Richdog · 21 Aug 2006 at 11:41

Visage said:
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? :confused:

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.

Visage · 21 Aug 2006 at 11:45

Richdog said:
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!

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.

Which taxes would you raise to replace IHT?

Raymond Lin · 21 Aug 2006 at 11:49

Richdog said:
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.

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.

Morba · 21 Aug 2006 at 11:54

Raymond Lin said:
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.

again, inheritance comes from someone dying, therefor it is a death tax.
you died, we will take 40% of your estate over x value. thankyou

Richdog · 21 Aug 2006 at 11:58

Visage said:
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!

Raymond Lin said:
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?

Von Luck · 21 Aug 2006 at 11:59

Richdog said:
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!

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.

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.

Visage · 21 Aug 2006 at 12:06

Richdog said:
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!

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

Raymond Lin · 21 Aug 2006 at 12:10

Morba said:
again, inheritance comes from someone dying, therefor it is a death tax.
you died, we will take 40% of your estate over x value. thankyou

Correction, you died, decide someone else is going to get £££thousands and may be millions, then it gets tax.

Give that to Red Cross, it won't get taxed, but you are still dead.

singist · 21 Aug 2006 at 12:13

Don't get me wrong here, I hate the thought of the government getting 40% of anything over the threshold but there's an awful lot of "worked hard, sweated all their lives for it" etc being spouted here when, in fact that is probably NOT the case .... ie the parents bought the house for £50k way back and now it's worth £500k .... where's the hard work that earned that profit? (yeah I know it's not that simple but you get my drift)

As stated earlier, get proper advice if you want to minimise the liability and do it early enough; the law may or may not change and there's always the chance that it could actually change for the worse ie the rate go up, so if you want to inherit what your relations intended, get them to take advice early on and act on it.

Richdog · 21 Aug 2006 at 12:32

Von Luck said:
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.

Visage said:
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.

SiD the Turtle · 21 Aug 2006 at 12:35

That last part is very true.

You earn an income and that is taxed. Then you die and it gets taxed again.

thelankymatt · 21 Aug 2006 at 12:39

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

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.

Von Luck · 21 Aug 2006 at 12:45

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

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

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

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

Hardly news that the number of people affected by IHT has risen, is it?

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?

tbz_ck · 21 Aug 2006 at 13:07

No Von Luck.....

Look at theLankymatt's post. Thats the answer.