To not see the problem with inheritance tax

(334 Posts)
AgaPanthers Wed 26-Mar-14 18:11:16

"Millionaire lingerie boss Michelle Mone has called for inheritance tax to be axed to stop the government spending her money when she dies."

Surely it's better than the government spending her money while she's alive? I mean they have to get their hands on people's money one way or another, and if anyone doesn't need it, it's the dead.

"I work really hard every single day - like a lot of people - for my children and for my children’s future,’ she told BBC 2’s Newsnight.
‘I want them to have that little nest for their future and for their children, and I don't see why I, others should work extremely hard, pay your tax and then when you die it is like a double whammy."

I work hard for my children too, so that they have a good education and can make the most of their talents. But I don't really see why my grandchildren, for example, would need to receive my millions (if I had any!) untaxed.

Others seem to feel the same way, giving to charity www.news.com.au/finance/work/tycoons-who-wont-give-money-to-their-children/story-e6frfm9r-1226702468883, rather than enabling several generations of progeny to be idle wasters.

For the record, the IHT rate is 40% above £325k, but for a married/civil partnered couple, the allowance is transferrable, so a married couple can leave £650k (which is 32 years labour at the average wage.) entirely tax free to their children.

GhoulWithADragonTattoo Wed 26-Mar-14 18:19:49

I 100% agree with you. No better time to pay tax than when you die. I've thought this for years but know it's not a popular view. It's also a good idea from a social mobility point of view as it means less inherited wealth.

meditrina Wed 26-Mar-14 18:22:24

It's taxing what you've got left after what you've paid all the tax on it once already. Which is reason enough for me. I'd like to see it, and tax on gifts, done away with altogether.

feellikeadairycow Wed 26-Mar-14 18:23:06

. . . only two things in life are certain Death and Tax's

CHJR Wed 26-Mar-14 18:24:02

Personally I think that inheritance should be taxed at 100% (everything goes to the tax man) before ANY earned income is. Who are all these people who feel so entitled to get money when their family members die?

And isn't it supposed to be good for the economy that people spend their money instead or hoarding it?

CocktailQueen Wed 26-Mar-14 18:24:21

But there are ways to avoid paying IHT - trusts, gifts to family etc.

OnIlkleyMoorBahTwat Wed 26-Mar-14 18:24:30

I also agree. IHT is only paid by a small percentage of very rich people. The inheritance that will be left will still be more money than what most people have. She is also free to give away whatever she wants during her lifetime without tax, providing that she survives for 7 years after the gift.

Tax has to be paid in, so it is only fair that those who have more money than they know what to do with make the biggest contribution.

Wantsunshine Wed 26-Mar-14 18:26:16

But some people would have already paid 40 or 50% tax on their earnings. Why should the govt. dip in again once they have died and tax again?

CHJR Wed 26-Mar-14 18:27:25

And no, meditrina, it's not double-taxing the same person. First you tax the income of the parents, but once it becomes income to someone else (their kids) those kids should pay tax on what THEY're getting unearned.

Granted as the mother of a SN child and daughter of an elderly person with dementia I recognise plenty of exceptional cases arise.

GertTheFlirt Wed 26-Mar-14 18:29:03

People who distrust their relatives more than they dislike the government pay inheritance tax.

It's a voluntary tax, applied to the bewildered. No one needs to pay it if they sort their financial affairs out appropriately

WooWooOwl Wed 26-Mar-14 18:29:38

I don't agree with inheritance tax. It's money that has already been taxed once, and once it has been taxed, it should be down to the individual where it goes.

The tax isn't paid by the deceased, it's paid by the person that inherits.

I have a friend who has been financially crippled for years because of inheritance tax. As if losing both of her parents at the same time wasn't bad enough, she was expected to lose her home as well to pay the tax. She was only 21 when they died, she spent her 20's living with various lodgers to try and pay the tax without losing her home, as well as working full time and running her own business. She finally sold the house in her early thirties, but she should never have had to.

Cobain Wed 26-Mar-14 18:29:44

I have one wealthy relative and other than his immediate family the only other person to benefit is his accountant, the tax man will see very little.

TheGirlFromIpanema Wed 26-Mar-14 18:29:57

It's taxing what you've got left after what you've paid all the tax on it once already. Which is reason enough for me. I'd like to see it, and tax on gifts, done away with altogether

But all tax is already taxed as it were, apart from income tax.

VAT, Capital Gains, Road Tax, Council Tax, Stamp Duty, Fuel Tax.....

The previously been taxed argument falls down at this point imo.

meditrina Wed 26-Mar-14 18:30:13

"Who are all these people who feel so entitled to get money when their family members die?"

Children under 18, and anyone else dependent . No earning power, but need to be taken care of.

Death can happen at any time.

And a state sell off of all granny's jewellery or grandpa's medals because nothing of value can be kept is downright heartless.

Coffeethrowtrampbitch Wed 26-Mar-14 18:31:56

But Want the beneficiary of the money hasn't paid any tax at all on it. They are not being taxed twice; the parent is paying income tax, the child inheritance tax.

Why should someone inherit money tax free when others pay income tax?

Wantsunshine Wed 26-Mar-14 18:32:34

If I have any money or property I want my children to have it. I hopefully will have worked hard enough that they can have some help from their parents

OttilieKnackered Wed 26-Mar-14 18:32:41

I hate the 'I've already paid tax on my income' argument. Does that mean you refuse to pay VAT then? Or council tax? Or capital gains tax? And what about wealth that wasn't earned? Exponential increase in property value? Or wealth that has already been inherited.

Inherited wealth is a massive entrencher of inequality.

wannaBe Wed 26-Mar-14 18:33:15

but she will already have paid tax on the money she earned. so why should someone pay tax on it again? I think she's right.

I don't think anyone should be entitled to inherit anything, and I am always a bit hmm at this idea of working hard so that one's children/grandchildren can be provided for, but I don't see why, if it has been taxed already, it should be taxed again. And £320k might seem like a lot, but e.g. if you're living in London it could be the price of a two bed terrist house, which wouldn't necessarily make the owner rich, but might mean they are mortgaged to the hilt and the life insurance covers it when they die hence leaving the money.

Bearbehind Wed 26-Mar-14 18:33:21

CHJR your posts make no sense.

Are you really saying that if you died tomorrow you'd want everything you had to go to the tax man rather than your SN child? hmm

JacqueslePeacock Wed 26-Mar-14 18:33:53

I agree wholeheartedly, OP.

dolphinsandwhales Wed 26-Mar-14 18:34:50

Yabu. If I pay income tax on earnings and choose to buy a house, pay a mortgage for thirty years and then pass it to my children when I die, why should they pay tax again?

Also it doesn't take into account geographical differences, ie my small house in London is worth over the tax free allowance, so if I want to leave it to my childthen they will have to sell it to pay the iht. If I had the same small house in a cheaper part of the country my child may not need to sell it to pay iht and could live in it. I think I'll gift it to my child when they reach 18 so that they get it rather than the government.

meditrina Wed 26-Mar-14 18:34:54

The beneficiary would pay tax on any future yield from the sum, and of course would, when spending, pay the VAT, Capital Gains, Road Tax, Council Tax, Stamp Duty, Fuel Tax etc.

Plus the IHT - an additional slice.

So perhaps double taxation is the wrong phrase, triple taxation might be more apt?

OttilieKnackered Wed 26-Mar-14 18:35:46

I see that the argument has already been made more eloquently.

It's interesting that people have no opposition in principle to paying on tax on money they've actually worked for but wail and moan about having to part with free, unearned money.

TheGirlFromIpanema Wed 26-Mar-14 18:37:20

Does anyone have anything other than its already been taxed as an actual reason why it should be abandoned?

Fact is that other taxes would rise if MM has her way.

Where do people suggest the shortfall should be made up from?

Higher tax on fags n beer? Restoring bingo tax?

Tax never seems fair on a personal level, but what are the alternatives?

WooWooOwl Wed 26-Mar-14 18:39:25

Why should someone inherit tax free?

That is such a lame point to make.

Why should anyone buy anything for their children, or do anything for them above the bare minimum?

It's not only the very wealthy that are affected by this, there are plenty of average families affected by it.

I will be doing everything I possibly can to ensure that my children aren't liable for IHT, but that will only work if I live to a decent old age. Why should they be penalised if they lose their parents while they are still relatively young?

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