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Is it too early to chat about billionaires hoarding land and avoiding paying inheritance tax?

(169 Posts)
feellikeahugefailure Wed 10-Aug-16 12:30:04

I know it involves a death and that's very sad for the family, but irrespective of that I do think inherited unearned assets is huge reason for inequality. The UK ranks badly for equality.

TrojanWhore Wed 10-Aug-16 12:33:18

Yes, everything you own should be taken on your death by The State. No exceptions.

Prudent and feckless alike leave no inheritance.

dodobookends Wed 10-Aug-16 12:34:47

Yes, it is too early, someone's died unexpectedly.

andintothefire Wed 10-Aug-16 12:35:00

I agree, but there is no desire among the electorate to increase or overhaul inheritance tax. With rising property prices, it frightens me even more that young people who work hard and earn their money are taxed so highly compared to those who are simply handed large sums of inheritance from parents or grandparents. Personally I would consider taxing all unearned and inherited income the same as earned income. Most inherited income now has not been taxed as earned income at all because it is as a result of rising land and property prices.

AllPowerfulLizardPerson Wed 10-Aug-16 12:37:13

"Personally I would consider taxing all unearned and inherited income the same as earned income."

So you're in favour of cutting IHT to income tax levels?
Or raising income tax to IHT levels?

Silvertap Wed 10-Aug-16 12:37:55

I'd stop people investing in farmland as an IHT get out

TooExtraImmatureCheddar Wed 10-Aug-16 12:38:36

I don't think it's too early unless someone is going to come on and say they are close friends or family of the Duke of Westminster. For the rest of us who don't know him personally, I think we can discuss anything we like.

StillDrSethHazlittMD Wed 10-Aug-16 12:38:48

Ah, that'll be the Westminsters, who set up several charitable trusts to dish out a lot of their wealth you're referring to. The Duke of Westminster who was so appalled at the way injured servicemen were treated he came up with the idea of a Defence and National Rehabilitation centre which can look after upto 200 wounded servicemen at a time, got the land for it, gave them a huge chunk of the funding and got other mates to get involved.

Awful man.

andintothefire Wed 10-Aug-16 12:40:42

AllPowerfulLizardPerson - there are lots of different possible solutions, but the way that IHT works now is that an individual can inherit hundreds of thousands tax free. In contrast, somebody else would have to work for many years before they can earn anything like that amount. IHT is taxed totally differently to earned income because it is a tax on the estate rather than on the amount an individual receives. I would be interested in exploring a different approach that focuses on the recipient.

specialsubject Wed 10-Aug-16 12:41:45

Are you happy for everything you've ever had from your parents to be taken away, however big or small? You want equality, don't you?

Sooverthis Wed 10-Aug-16 12:42:14

I think you can discuss it or you can phrase it as unpleasantly as you have. Hopefully you own nothing but your principles or is it a case of anyone who has more than me is in the wrong.

andintothefire Wed 10-Aug-16 12:51:19

specialsubject - the difference now is that most inherited income has not been taxed at all - it is a primarily a windfall from rising property prices. In contrast, the money that parents spend on their children growing up generally comes out of earned and taxed income. Inequality is a fact of life, but yes I am in favour of trying to reduce it so that we are not in a situation where young people without property owning grandparents and parents are so heavily disadvantaged. The problem with IHT at the moment is that it doesn't really take into account the unearned nature of the inheritance - it is money passing from one generation to another that has never been taxed at all (or taxed much more lightly than earned income).

But as I said upthread, I know there is no will along the electorate to resolve this particular inequality so there is little point debating it!

As an aside, actually I would be happy to inherit nothing from my parents: I hope they live long enough that I already own a home by then, and I would much rather they spend their money on a nice retirement and, if necessary, a lovely and respectful care home. I have no problem at all with their house being sold to pay those living costs. But again I know that is not a typical view!

andintothefire Wed 10-Aug-16 12:52:07

(Sorry for typos - phone being extra sensitive for some reason!)

ClopySow Wed 10-Aug-16 12:52:35

IHT of 40% is only payable after £325000 so entirely different from the PA of £11000 on income tax lizard

If IHT was charged at 20% after £11000, and 40% after £40001, that might seem fairer.

Cinderbloom Wed 10-Aug-16 12:52:37

Good on the DoW. It's the least he could do though, surely? I mean, as a proportion of his capital or income, isn't it the same as a poor person who puts money in the charity box for a good cause, or gives a needy friend or relative a tenner they will actually miss? Neither of which have any favourable tax implications.

StillDrSethHazlittMD Wed 10-Aug-16 12:56:18

Possibly. But plenty of wealthy people do sod all. The more I read about the Westminsters, they do seem to have been pretty good with their philanthropy. I think there are plenty of other people who deserve a bit of muck raking over. It's hardly their fault they inherited wealth!

AllPowerfulLizardPerson Wed 10-Aug-16 12:56:35

Both taxes have a personal allowance, and it's different because a lifetime's assets are different from one year's income.

Also, except for estates which have been intact for centuries, those lifetime assets have been paid for from taxed income.

Of course, the fastest way to ensure "equality" would be to abolish the ability to pass on private property at all. Or allow only £11k inheritance.

CathFromCooberPedy Wed 10-Aug-16 12:57:58

I don't get the British hate on inheritance. Why should something that has possibly already been taxed, be taxed again?

But then I'm expecting a big inheritance from my DP when they pass. They both started out with barely a bucket to piss in and they've done bloody well for themselves.

Thankfully they don't live in the UK though.

LewisAndClark Wed 10-Aug-16 13:01:58

I'm more enraged about the primogeniture issue.

Cinderbloom Wed 10-Aug-16 13:04:24

Very true, StillDrSeth. Plenty of others who can live astounding lives on the income of the income of the income and still do everything in their power to scrooge the capital.

AyeAmarok Wed 10-Aug-16 13:08:19

Because, Cath, it widens the gap between the haves and have-nots.

And more social equality would be a good thing.

andintothefire Wed 10-Aug-16 13:13:28

Cath - also because most of it actually hasn't been taxed (or has been taxed at lower levels than other investments). It makes sense not to tax somebody on the increase in value of their primary residential property during their lifetime, but we are in a situation at the moment where a child who receives £300k from the sale of their parents' property can easily be receiving £200k + of that sum that has never been taxed at all. The increase in property prices has not only made that more obvious, but has entrenched inequality because those people with property-rich parents are receiving so much more tax-free than others can earn in their lifetimes.

RiverTam Wed 10-Aug-16 13:13:40

I've just read that he fought Westminster council over their plans to sell off social housing built on his land in Pimlico (ie he wanted it to remain social housing). On that small example alone I'm not sure his money going to the government is necessarily better!

StillDrSethHazlittMD Wed 10-Aug-16 13:16:39

The problem is, Aye, different people have different views of what they regard as social equality.

I, personally, think the amount of money paid to footballers is exorbitant, unjustified, and contributes to an appalling attitude towards other people in a great number of high-level players. It cannot be right, that Manchester United can continue to operate with a debt equivalent to £390 MILLION. Any other business would be closed down long before this. Other people think this is fine. But it's social inequality nonetheless and I think far more obscene than inherited wealth.

derxa Wed 10-Aug-16 13:20:56

Yes it is too early. A man has died at a fairly young age and his family are grieving. I actually think this thread is despicable. Why don't you go on the DM website. Plenty of people like you on there.

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