What's the problem with Inheritance Tax?

[QuickBrown]

Inheritance tax seems to be really unpopular among certain sections of society. Obviously people always object to any taxes, but it seems to me to be the absolute least worst tax, as the dead have no use for money.

Those who object to it or know others who do, can you explain a few things to me? Firstly is the the idea of your estate being taxed once you are dead that you object to? Or is it that you are due to inherit and this will reduce their estate? Or something else?
Also where do you stand politically on other inheritance, for example are you pro-aristicracy and inherited titles?
If you are worried about your own estate being reduced before your children get it, are you someone who has given a lot to your children financially in their adult years or do you expect them to make their own way in life?
Also if you have inherited significant sums, has this swayed your thinking?
I feel a bit out of step with other people's thinking here!

An ageing population is an expensive one

People do get attached to buildings though - see churches, schools, libraries etc. A family home that has been carefully passed on to ensure that no one is homeless being divvied up for HS2 or similar is obviously going to make people upset. If they were actually taking it from billionaires who likely have less emotional attachment to their multiple homes and yachts, I don't imagine it would create such an emotive response, and only from 2% of the global population mostly not even on the current books, so less people to be upset.

I would happily pay my IHT if we could annually sacrifice a billionaire or have them compete in a show like Squid Game. Let's watch Boris, Farage, Jeff Bezos and Musk fight it out for who keeps their mass wealth. You'd make more from one of them than turfing people out of homes who then have to use resources they didn't before.

I'd much prefer that property is taxed as a capital gain upon death.

Not as much as governments wasting our money. Especially the last one in charge. It was billions upon billions, wasted while we watched everything get cut to the bone and stop working.

@Happyjoe. an ageing population is still expensive

And the bottomless pit of benefits, benefits were meant to be a safety net for the poorest in society now practically everyone seems to be entitled to something, it is unsustainable.

@chirrupybirdwhere do you think the majority of the welfare bill goes?

"Tax them to death" is implied I guess?

I agree OP and I speak as somebody who wrote out a six figure cheque to HMRC. There was still plenty left over.

It’s not a brilliant tax because not many people pay it - less than 5% so it doesn’t really raise a lot of money for Government. £7-8bn compared to £180bn for VAT.

Well £8bn is better than nothing. But fundamentally it is a tax on middle class people in the SE of England. Very wealthy people do not pay IHT, neither do the less well off. So it’s arguably another tax like SDLT, mansion tax (and increasingly, income tax) that is largely paid by a small and diminishing group of people who are feeling squeezed to pay for the public services used by the whole population.

You would have to do it at point of sale as well, or people would just move to avoid it and many elderly people do move to downsize anyway so they wouldn't pay much if anything in CGT.

Problem with such taxes that do not generate as much income at first as usually expanded to include larger shares of people and raised to higher levels, down the line.
Everyone is to lose in the long term not just the 5% currently.

I agree OP.

People forget that with no inheritance tax we'd still be in the situation of extremely rich landowners holding on to vast amounts of wealth and the rest of us as serfs

40% over the threshold is too high
The majority pay nothing
ie £500,000 for a single
£1mill for a couple

It’s too easy to avoid if you have the money to do so

Those against it tend to be those who will be liable to pay
Those who aren’t against it tend to be those who never will be

If it was a low % of approx 10% on everyones estate with no lower limit and no ability to avoid it
it would be a fairer tax.

The fairest of course is no one pays but we have too much money going out and not enough coming in in this country.

So we need it

Why on earth will you have to leave the country because your DC will pay tax if you leave them more than £1million? That's a huge amount of money

Of course it is. So it makes sense to have governments not waste our money, instead of taxing taxing taxing doesn't it?
This money by the last gov would've gone a long way to paying for elderly care, no?
https://bestforbritain.org/publication/scandalous_spending_tracker/

We still are aren't we?!

There are practical issues. DM’s estate will have a huge bill because she has done nothing whatsoever in the way of organising things efficiently.
It will make life massively complicated to need to find a huge wadge of cash to pay it, before being able to sell her assets or get probate done.

spelling error!

Those sorts of property have become ridiculously expensive to maintain anyway, so have inevitably been broken up or turned into businesses or even given away. The serfs expect to be paid a lot these days! Inheritance tax may have been the last straw for some, but it was mainly social changes after the 1st and 2nd world wars.

Far less than it was.

The aristocracy went into steep decline and had to sell up in the 1st half of the 20th century - due to inheritance taxes.

As a single mother in the south east I object to IHT. My allowance if I die will be £500,000. That will not cover the value of my house that I currently share with my adult DCs. They would be made homeless.

Why should my DCs be penalised against those that had married parents and therefore would inherit twice the amount without tax.

Because its double taxing and most parents work to give their kids a better life - but then the taxman wants to take some of that (again). Its not a common tax around the world - ironically just in the UK where the really rich have enough money to avoid inheritance tax due to being able to afford trust funds.

Yes, I know. My ?! was a bit of clue as to my tongue-in-cheek reply. Sorry!

Norway, Sweden and Denmark have all scrapped their inheritance tax, and they are seen as very equal countries.

Those with big estates have other ways to avoid it anyway: see ownership of farmland as a recently changed example.

@WhatsAWeekend it’s £500k for a single person with a house and direct descendants, otherwise it’s £325k which is unfair.