To disagree with inheritance as a concept

[HeadsDownThumbsUp]

Just that. I think it's odd that the concept of inheritance is barely questioned in our society.

I don't think that anyone can really talk about social mobility in a meaningful way, or interrogate the class system, while wealth is still inherited.

Inheritance IS the class system.

In my opinion, inherited wealth is incompatible with a meritocratic society. It is also add odds with entrepreneurialism, and more generally the notion that wealth is earned through hard work, and thus deserved.

Thoughts?

[Arisbottle]

Llkjj I have not said that anyone has stopping me. I was explaining why my DH and I will not be leaving our children the inheriticance that we could

We are not wealthy but I suspect that because we have been lucky we will be able to leave our children a six figure inheriticance if not more. We have five children at the moment and hope to have at least one more. That would mean leaving each child around 200K, I am distinctly uncomfortable with giving one person that sum of money. I do think that sum of money could make a huge difference to a number of individuals if donated to charity - which is what we will do with most of it. I also have no problem with 40% of that money going back into the state to pay for schools, hospitals etc. In fact I feel some pride that someone as little and insignificant as me could do that.

[Vickibee]

Has anyone seen heir hunters where beneficiaries of wills are tracked down. It turns out you have been left £000's by some long lost relative you never knew? Doesn't seem right but it is better than going to HMRC I guess

[HeadsDownThumbsUp]

Sorry - I got sidetracked by another thread. Bad bad OP. I will get back to this - do want to have time to write proper answers.

[lljkk]

You can already do that, Arisbottle, nothing stopping you.

I think it's a good question to ask OP, but unworkable to enforce except thru changing cultural expectations.
People would just find ways around it.

Can I still give gifts to my kids? What will the cap be before it's an inheritance, £100, £1000? Per year, per life? Can I sell my house to my kid for £1000, why not? Etc.

Besides, how is it okay to ban inheritance but still let some people pay high ££ to educate their kids at most prestigious schools, some kids get tutoring & others don't, some get elite sports tuition others have no opportunity, etc. all based on household income, etc. Inheriting your parents' estate is like every other circumstance/advantage/problem you pass to your children, really. Inherently unfair.

[HeadsDownThumbsUp]

Can't reply today - not being rude - but will get back to this.

[claig]

Brilliant post, Jenny70, that sums up the lunacy of this crazy fantasy

[Jenny70]

And when a partner dies, their surviving partner should not inherit their possessions?

If so, what if the surviving partner remarries (possibly someone a generation younger) then passes it to them.

When the new partner is again single, they could choose a partner etc etc.

And if both parents die, children get what to look after them into their adulthood?

Crazy notion, in theory it sound lovely that everyone starts off the same, yada yada yada, but in reality families would be torn apart, homes sold off, children left with no home to live in, inhertited money wasted by the government and the seriously wealthy would find ways around it (marrying a token younger person, income in a business or trust etc).

[CloudsAndTrees]

I agree badguider.

The threshold is too low IMO.

I think if an inheritance of more than £325,000 was held in cash, then it might be fair enough, but when it's in property it really isn't. That amount is about the current value of my house, and it's only a tiny three bed ex council semi. I just haooen to live in an area where house prices have risen a lot in recent years. It has loads it needs doing to it to maintain that value, and it's value is one comparative to other property in the same area.

If DH and I popped our clogs tomorrow and our children were old enough to be independent, by the time funeral costs, probate, selling costs and tax had been paid for, our dc wouldn't stand to inherit that much in the grand scheme of things. It would be enough to get them a deposit on their own mortage, or perhaps make their crippling mortgage slightly less crippling, but it's not actually going to give them that much advantage at all.

Certainly not anywhere near enough for other people to get get up about or be disadvantaged by.

[badguider]

Seeing homes and small businesses as nothing but the equivalent in cash imo contributes to the distruction of communities, particularly rural ones.

[badguider]

I would add to your thoughts about the IT threashold some more thought about 'assets' such as homes, land and businesses.

It's possible to 'value' these things over the threshold when actually they only potentially have that value if sold. You cannot actually hand over 20% or 40% of a house. So the whole thing is essentially removed from the recipient if they cannot raise a loan against it or have the money to start with.
The same applies to farms and businesses because although in theory you can sell a % it may make the farming impossible/uneconomic or change the entire structure of the business (it's no longer a family business if 40% is sold to outsiders at market value and this changes the laws the business is subject to - duty to shareholders comes in).

Any protection for homes and farms is going to stray into ending up protecting the landed gentry... Many large estates are asset rich and very very cash poor. I do understand that... but I think that is a price to pay for the guarantee that generations of small holders or small business people are not thrown out of their own family business/home. Also, I am not sure that forcing the sale of a stately home or castle is always the best for anybody as they end up bought by rich outsiders or foreigners who pay their tax oversees rather than maintained by the landowner with generations of ties to the place (good or bad).

[nooka]

I wonder what the effect of banning gifts and inheritance would do. Would people who are successful become much more hedonistic, or would they simply not work very hard because there's not much point in gaining wealth if you have no influence in how it's spent?

[SDTGisAnEvilWolefGenius]

HeadsDown - where would you draw the line? Is it financial inheritances only that you would abolish, or money and valuable property, or all property? We are going to need a huge administration if all property is to revert to the state upon the death of the owner. Can we really afford all the civil servants we will need, to decide what is to be done with everyone's dodgy 80's music cd collections and holiday souvenirs from Majorca?

[CouthyMow]

YABU.

If I had early money, and not spent it all, I would WANT to pass it on to my DC's.

OK, I am neither in line for an inheritance, nor will I have anything (other than about £3) to my DC's, so maybe what do I know...

Yes, it DOES keep wealth to those families that already have it, to a certain degree, but surely if you had a million in the bank, and you died tomorrow, you would want that money to go to your DC's?

It's just human nature, innit...

[Mimishimi]

YABU. I think social mobility has a lot to do with other factors rather than just money. I thoroughly dislike the notion that my life, or somebody else's, would be richer and more fulfilling if only others with more resources had less of them.

[HeadsDownThumbsUp]

But 3% of estates isn't 3% of all dead people.

The HMRC figures there won't include transfer of assets to a spouse or partner anyway, since they're not eligible for taxation, which is why the total number of estates listed is so low, compared to the annual death rate. The vast, vast majority of children do not have estates either, and so are not processed in this way. Nothing like 3% of all dead people are paying IHT - around 3% of estates eligible for taxation are taxed. The vast majority don't come close to the inheritance tax threshold.

[Talkinpeace]

Redbindy
You obviously have a particular page of the tax manual open.
For the enjoyment of everybody on the thread, please name a category of gift that becomes taxable upon donation.
(as against if the donor dies within 7 years of making the gift)

[Talkinpeace]

Headsdown
Sorry yes, could not find my normal link on the matter.

264,750 estates
14,702 paid IHT

but as the number of deaths in the UK is around 484,000
www.ons.gov.uk/ons/rel/vsob1/mortality-statistics--deaths-registered-in-england-and-wales--series-dr-/2011/stb-deaths-registered-in-england-and-wales-in-2011-by-cause.html
And there will be no IHT due when the first partner in a couple dies
the fact that 3% of all dead people : including children and the destitute : are paying IHT implies that its a lot more than 3% of people who could have descendants are getting hit by IHT

[Redbindy]

Talkinpeace
"largely is" is not the same as totally is.

[HeadsDownThumbsUp]

Talk - I don't think you're reading that HMRC document correctly.
264,750 is the number of estates the document details, 250,048 of those paid 0 tax.

14,702 estates paid tax that year.

Tiny numbers.

[lookoveryourshouldernow]

..can't be bothered with all this inheritance stuff anymore...

My family have worked hard all their lives - my Mother's parents (& their parents before them - ditto back one generation) and my Father's parents (& their parents before them - ditto back one generation....) - all condensed down to one Family home and some savings.... all gone - nearly £390,000+ in Care Home fees - as my Mother has the misfortune to become ill after her husband had died.. doubly incontinent, semi-comatosed, immobile, unable to talk, hear, see etc etc etc etc

Luckily (sic ??) another member of the family - who had originally decided to leave his estate to my Mother changed his will - otherwise this amount would have also been considered "fair game" for her care...

I intend to leave my Estate to my children - not that they have yet "earned it" - but it is MINE - I EARNT it - and I will damn well ensure that they benefit from it...

[SDTGisAnEvilWolefGenius]

Discussing inheritance and whether it should exist as a concept, implies that it is OK for an outside authority to dictate what happens to any individual's property after death. I know that inheritance tax exists, but it is my understanding that the tax on an inheritance will not amount to the majority of the money/property, and I can accept that.

However, abolishing the concept of inheritance altogether implies the government (or some other authority which would have to be set up by Act of Parliament and would therefore be very vulnerable to being a tool of Government even if this was not the original intention) taking all of an individual's money, goods and chattels at their death - and to be perfectly honest, I find that a disturbing prospect.

[BoulevardOfBrokenSleep]

TalkinPeace
You need to read more tax law

[Redbindy]

Talkinpeace:
Also look at gifts.
Dead people may not be able vote but they also don't eat or spend money in other ways. They don't actually need the cash. Greedy relatives take an interest though.