If you tend to vote conservative can I ask a few questions - let’s keep it light and respectful!

[Holidayhavanas]

Full disclosure I tend to vote Labour, but I’m really interested to know if you tend to vote for the tories, what is your reasoning behind. the real shortage of qualified public sector workers for example teachers, social workers, police. A health service and education system on it’s knees. Police forces like Manchester and Met in special forces. I think that it’s symptomatic of years of underfunding. I work in the public sector and feel on a daily basis that the country is absolutely screwed. I assume most tory supporters would say it’s down to austerity but I feel it’s ideological cutting back on public funding. I’mgenuinely open to hear other views as I find it so depressing and just hope that it’s something I am missing. Let’s try and keep this respectful 😊

It's not really unearned though. It may not have been earned by me, but it was by my parents. And I advise my in-laws on their investments so, arguably, I've earned part of it.

It's also money that my family paid income tax on when they earned it, and possibly again when they invested it. Why shouldn't people be able to leave money to their kids? I encourage my parents to spend their money as I'd rather they enjoyed it than leave it to me. But I don't think IHT is a positive.

Just to add, a friend has emigrated to Australia and he said they don't have inheritance tax. Which surprised me.

the reluctance to pay IHT on a completely unearned windfall.

The money has been earned by someone and already taxed at least once and potentially more than that depending on where it was invested. There is no incentive to save if you cannot pass it on. I have put my money into my house, I absolutely intend to sell it should I need it for care or at the point where it no longer meets my needs. If I am lucky enough to shuffle off this mortal coil without needing the money from it for care needs then it should absolutely go to my child/ren. What right has anyone else to it?

If we don't tax or redistribute that wealth somehow after people have died, the money just remains in private hands.
Which I feel is not the 'best' use of the money.
Its been spent and enjoyed by those who earned it. The children have benefitted along the way, and do still inherit most of it. I feel it is right to make the rest available for public spending.
Others disagree though.

If we don't tax or redistribute that wealth somehow after people have died, the money just remains in private hands. Which I feel is not the 'best' use of the money.

But that's capitalism and creates an incentive to work and save. Why should the state have a right to money that you've earned and already been taxed on multiple times by then? Bluntly, it's my money not theirs.

Absolutely @MichaelAndEagle. Inherited wealth is the enemy of equality. Our kids are welcome to what’s left when we’ve finished with it and if it’s liable to IHT, they’ll still be better off.

lot123 I'm not saying either way but I am saying that it is incongruous with the idea of personal responsibility.

Isn't it as much a mechanism to prevent all the wealth being in the hands of a very few, as much as anything?

So if I inherit property from my parents, my children get that plus their inheritance from me, and so on.

And with all the property and wealth in only a few peoples hands, so is all the power? They are the landlords, the business owners etc and the rest of the population are stuck in a massive power imbalance with limited opportunities to get out of it.

Ah well, on this point we have a fundamental difference of opinion and I respectfully disagree.

I benefitted from an inheritance.

I would like to see all of it taxed, sliding scale, no loopholes e.g starting at 5% for first 100k, rising 5% with each each 100k, up to a maximum of highest income tax rate.

However, in the case of property, i would propose this: No IHT paid by the first inheritor but 2nd generation inheritance pays the normal IHT tax but only if property never sold, if sold, taxed as cash.

This would enable family homes to stay in the family as they'd be plenty of time to sort out payment of taxes.

@lot123 Monies gained through the increase in a property value has never been taxed.

You pay capital gains on any second property, so yes it has.

Also, IHT is paid on the value of the estate so it effectively does tax an increase in property value.

The rise in value on a primary residence is not taxed. And never will be on an inherited property if it falls within IHT thresholds.

Inherited wealth is the enemy of equality.

Interesting choice of words (meant respectfully as tone can be hard to gauge in writing). I don't see it as an enemy of equality, unless it's the race to the bottom type of equality which I fundamentally disagree with.

I think the state should provide equality of opportunity to the extent they can, so a good standard of education and healthcare for all. I don't think you'll ever get equality of outcome in a capitalist society. Undoubtedly kids from higher income backgrounds have advantages and this plays a role in their career opportunities.

But your attitude to education and work also plays a big part in improving equality, together with the sacrifices you're willing to make. I worked in investment banking which was very lucrative but meant I worked ridiculous hours and had no personal life. Lots of people aren't willing to do that (understandably). (I know that some people have to work equally long hours for minimum wage).

I'm not sure inheriting some money from your parents when you're in your 50s/60s is a key driver of inequality as you've had to earn your own money for most of your working life.

I'm not sure inheriting some money from your parents when you're in your 50s/60s is a key driver of inequality as you've had to earn your own money for most of your working life.

Many people inheriting at that age pass the money straight on to their adult kids. It’s a factor in the incessant rise in house prices. I know someone who bought their adult child a house when they inherited.

I'd agree it's a safety net if nothing else. Perhaps allowing people to extend themselves more financially as they can ask their parents for help if things went wrong. Although some families are cash poor but asset rich and don't necessarily want to free up money by selling their house.

Either way, I don't think it's wrong for people to want to pass on money they or their family has earned without paying a big tax bill. Particularly if they've already paid up to 50% income tax/NI on it. From my perspective, I think that's enough of a tax on private individuals.

Tax

You go to work and earn some money. They tax it. (Income Tax, National Insurance)

You use some of what's left to buy things. They tax it. (VAT, Fuel Duty, Alcohol Duty, Air Passenger Duty etc).

The business you buy from makes a profit. They tax it. (Income Tax, Corporation Tax,)

You invest some of it. They tax it. (Stamp Duty on land and shares. Income Tax on rent and dividends. Capital Gains Tax on selling it or giving it to your children. Inheritance Tax when you die.)

You put some under the bed and leave it there. They tax it. (Inheritance Tax when you die.)

Particularly if they've already paid up to 50% income tax/NI on it.

Profits on a primary residence from the rise in property prices have never been taxed. Only a tiny percentage of estates qualify for IHT anyway and a couple can have a joint estate worth £1 million before it’s liable. I have very little sympathy for anyone who complains about paying tax on a seven figure sum windfall.

Inheritance tax is effectively a wealth tax so of course it taxes increases in property value (if the total value is above the threshold).

It just incentivises extensive tax planning and most people will find a way to avoid paying at least some of it.

Countries which orientate themselves around the redistribution of wealth, beyond the usual income tax which most accept, have not tended to do particularly well or treat their citizens particularly kindly..

I see personal responsibility as being slightly broader than the individual. Its extends to the family unit and probably sometimes to the local community. Several posts on here having provided the immigrant perspective in which the family plays a huge role. Not incongruous at all.

Countries which orientate themselves around the redistribution of wealth, beyond the usual income tax which most accept, have not tended to do particularly well or treat their citizens particularly kindly.

Which countries did you have in mind? Scandinavian seems to be doing all right, so do its citizens.

Asking in a non-goady way ... for those supporting inheritance tax, do you, or are you likely to, have estates that would trigger an meaningful inheritance tax charge due to their value?

Coming back to the self-interest point. I really don't want to pay a chunky inheritance tax bill. If other people are in the same boat, and they're keen to, credit to you for being altruistic.

Being open, I've started inheritance tax planning (in my 40s) to minimise our liability. It will be a flexible arrangement but if an accident happens, I want as much of my money to go to my kids as possible.

What Rookiemere said

Depends what you call meaningful. There would definitely be some to pay when we die based on current thresholds but I really don’t care. £250k for each of our kids would be more than enough and we’ll be dead. Of course we could spend years in a nursing home and power through it anyway

IHT generates around £6b per year. Not an amount to be sniffed at but in my view the fixation on it detracts from the real discussion which is how corporations should be taxed properly which would generate far more tax income.

As above, we live in a capitalist society and whilst there is unfairness that needs rebalancing, there also has to be incentives. Taking too many incentives away removes huge amounts of inventiveness (which benefits everyone). That is a fact of human nature.