100% inheritance tax?

[Kendodd]

Or 95%, something like that.
Thought experiment.
How would it pan out?

That would be ridiculous. Last time that level of taxation was inflicted by any government, anyone with serious money just moved abroad.

I'm not rich but I can (and would) move abroad. Working for 50 years and then having the government try to tell me I couldn't better my child's life chances would be all it would take.

Not 100% on how that would work

As if I could pass it on I wouldn't buy a house, when I was old I'd just rob a bank or something and go to Prison to get some meals and be looked after. Or I wouldn't save up for a retirement home, if let the give me to look after me.

Surly that would have more impact on the state?

To be fair a lot of inheritance is house price inflation which hasn’t been taxed

whay possible evidence do you have that Amazon don’t pay the “correct amount of tax”? Also you clearly have no idea how much the uk government debt is! It dwarves any profit Amazon makes.

nkn

To be fair a lot of inheritance is house price inflation which hasn’t been taxed

True, but it will be taxed as soon as a beneficiary buys a home with it that they wouldn’t have been able to afford otherwise. The taxman won’t miss out on anything.

The deceased won’t have benefitted at all from their home having gone up in value because it was still just their home. There is is nothing to gain from knowing that your house is worth more now than it was when you bought it when you’re still living in it until the day you die.

The beneficiary might benefit from the house price rise, but it’s not them that pays the inheritance tax.

Пока они делают вид, что платят нам, мы будем делать вид, что работаем
—As long as they pretend to pay us, we pretend to work.

When people have the necessities, and can’t accumulate more even though they work, productivity does decline. It was a factor in Soviet economic decline.

In the case of 100% inheritance tax, knowing that they’re essentially working for the benefit of the government, I imagine a significant amount of people would act in much the same way.

For those saying it would be unfair because the money has already been taxed, that applies with loads of things - we pay VAT, fuel duty, alcohol tax etc out of incomes which have already been taxed.

When someone receives an inheritance most don't pay tax on it. It's the money coming to the inheritor being taxed, not the money 'owned' by the person leaving the inheritance.

Well that could be true I don't know, but so what? Not everything has to be taxed.
There are enough taxes around already, another and in particular this idea of 95 to 100% inheritance tax would not work.
Wheres my incentive to bother buying a house, save money, work more hours just to give more money to whatever government is in.

I don't agree with 100% inheritance tax but I would support changes plus an attempt to crack down on loop holes for the super wealthy who always manage to evade taxes.

My understanding is that it is £500,000 for a single person and £1 million for a couple which is very high. I think a 50% reduction in the amount would be fair.

A lot of posters are saying that the inherited wealth has been all taxed which is untrue as most of it is entirely unearned housing wealth nowadays.
My parents, for example, have worked but not particularly hard (mum never went back to work after DC and dad probably worked 30-35 hours/week). However, the value of their house has risen from 5-600%. That is the case for most people in London/ SE currently.

I think you'd end up with elderly people living in hospitals, living on the streets or begging to be sent to prison so they can give away their assets before they die.

If you've paid a mortgage, then you've paid back much more to the bank in interest than you borrowed. Presumably this has been taxed?
Just because a person makes some money from house price rises, the government shouldn't be allowed to steal it from them (or their children).

I view it as comparable to the welfare state or NHS. If you want people to support these things and pay for them without complaint, then everyone has to feel invested - rich and poor alike. Which is why child benefit should be paid to all parents regardless of income and why free at source healthcare should be accessible regardless of income. People paying lots of money into a system need to feel that it is for them to use too. Or they won't willingly do what is necessary to pay for it.
There's lots that can be done to address structural inequality without stealing from ordinary people who have worked hard or just got a bit lucky.
Humans are self interested - we progress because we perceive there's something to gain from our efforts. If you want to completely fuck the economy, taking away peoples incentives to work is a good start.

When someone receives an inheritance most don't pay tax on it. It's the money coming to the inheritor being taxed, not the money 'owned' by the person leaving the inheritance.

It’s both isn’t it? I’m prepared to be corrected.

The way I understand it, it’s the dead person being taxed because tax is taken from everything that they leave.

The beneficiary isn’t taxed on what they receive, because the estate has already paid the tax. I think it would be fairer for people to pay tax on what they inherit, like a capital gains tax.

This. The wealthy already expose every loophole there is via offshore accounts, trusts and anything else they can find. The overwhelming majority of children in DC's class have school fees paid by grandparents so they give it to them now without having to pay inheritance tax in the future.

The people who will get hit the most are the ordinary ones who have worked hard to make sure their DC's life are that little bit easier once they are gone. All it will do is widen the inequality gap

@ImAvingOops
I take your point that everyone needs to feel invested in the system otherwise they become disenfranchised and possibly move elsewhere or work less hard. However, looking at what you have written, it's interesting that you refer to inheritance tax as 'stealing'. You could refer to any sort of taxation as stealing. What about income tax? That actually applies far more to your second quote below than to inheritance tax. That's paid on day to day work, skills, labour, etc. The rates for that are high at a far, far lower threshold. Why is that a fairer way to earn taxes? At the end of the day, we need to raise money through general taxation. It's just a way of deciding what is the fairest way to do this. I think taxing unearned income, often unearned and untaxed by the (often) parents is much fairer and more progressive than some other forms of taxation.

'Just because a person makes some money from house price rises, the government shouldn't be allowed to steal it from them (or their children).'

'Humans are self interested - we progress because we perceive there's something to gain from our efforts. If you want to completely fuck the economy, taking away peoples incentives to work is a good start.'

Well if I can’t leave my savings to my child, I (a) wouldn’t bother working as hard and (b) would fritter it all away on holidays before I die.

Taxman would actually get less because 100% of nothing is nothing.

Obviously we need to pay tax. But given that we pay in on everything else, it seems spectacularly mean to tax death!
If it was possible to raise enough revenue to fund society through inherited wealth instead of income tax or some of the other taxes, then I'd not be averse to that, since it would give everyone a better chance of a higher standard of living through their lives. But I don't know if that's possible.

But either way, we need to start with those who are passing extreme wealth down through the generations because it's those levels of wealth, concentrated in a tiny percentage of the whole population, which is causing the real problems, not Mr and Mrs Average being able to leave their kids the house!

I do think income tax is too high for many individuals. Particularly when compared to multinationals avoiding their fair share.
I think a flat rate for individuals might be a better system, with total exemption for those on low wages. Or better still, everyone gets paid a proper living wage that they can then afford to pay tax on. Idk, tax isn't my strong point but I just think 100% inheritance tax isn't the best place to start on addressing inequality

I stand to inherit a chunky sum. I'd feel much better about the tax if I was confident it would go towards improving services eg education, hospitals, local facilities for pools etc. A friend lives in Germany. She pays v high taxes and has excellent infrastructure etc. I just don't see what my money is going on and same with the hundreds of thousands that will be paid in inheritance tax before I inherit.

Nothing to stop you giving it all away to charity or making a voluntary donation to HMRC!

I think some of these arguments are nonsense, such as, if I have to pay inheritance tax I'll go to prison/live on the streets instead. They same is said about the elderly and care home fees and that just doesn't happen. Has any young person ever chosen to not buy a house because they'll only have to sell it to pay care home fees when they're 80.
All the nonsense about double taxation, for a start most of it isn't double taxed because it house price increases and even if it was, loads of things are double taxed.
Can we please only have sensible arguments.

The point about people spending all their money I think is realistic, I don't necessarily see that as a bad thing though, its putting money into the economy. If we had much higher inheritance tax it might also bring down house prices (?) if they aren't the financial assets they are at the moment and are solely a home. I think labour (as in work, not the political party) is worth too little and taxed to heavily and assets worth too much and hardly taxed at all. Its wrong imo.

I think inheritance taxes and especially trusts desperately need reform. Some estates have been in the same family for 800 years in this country, passing down to one heir in each generation, that just doesn't seem right to me. Unfortunately I think change is unlikely and the people sitting in the HoC and HoL benefit greatly from the system and the public (96%+ who will never pay a single penny in IHT) are supportive.

Some facts about IHT
Average age to receive an inheritance in the UK is 61.
Only about 4% of estates pay any inheritance tax at all and most of them only pay a small percentage.

They will get nothing from us. We would just spend as much as possible and give the rest to DC while we're alive and live in an old camper van. The first two is what we intend to do anyway.
Ordinary people's miniscule amount of savings should not be expected to balance out this corporate greed mess.

Op you’d have more a point if you were giving up your inheritance

But these posts are just easy to type rather than how you want it to be. Otherwise you’d take action

Another socialist vote winner 🙄

OP I think it would be fair to say that you can only leave money up to a certain value tax free. For me that could be the value of an average house or whatever the majority deemed fair. This would stop 800 year old estates being passed down - a lot of that wealth derived from the theft of common land in the first place. But what would be wrong is taking everything from normal people, while continuing to tax them in everyday life at current levels and not removing excessive wealth from the aristocracy and lender gentry and the super rich who are avoiding their fair share of tax.