Can't stick around long today, but will try to give a quick contribution.
First of all I want to offer my condolences to anyone who is recently bereaved and is going through the relevant legal and financial procedures. I understand that this an emotive topic, and I am not trying to make anyone feel uncomfortable, and I appreciate that all these decisions and issues come at a difficult time.
To those who have said that our current inheritance system is evidence of some sort of natural law:
As other posters have pointed out, other European countries all have different conventions when it comes to dividing inheritance. If inheritance was such a natural and universal concept - and emblematic of what it means to be human - then surely every society would deal with the issue in the same way? But they don't. Not even the ones that, superficially, seem to function very similarly to ours.
Nooka "I'm also not totally convinced that countries that tax at death more highly are any more equal than those that don't. The UK and the States have amongst the highest death duties and the biggest income disparities. Sweden, which has much lower income disparity (and is highly competitive) has no inheritance tax." This is interesting and I would love to know more about this. But I'm also guessing that most of the people on this threat who think that 100% tax free inheritance is a great concept aren't generally that interested in working towards a more equal society anyway.
Moreover, the urge to pass everything on to your children clearly isn't overriding - given that most people don't actually inherit very much. Are you really saying that people who don't leave a wod of assets behind when they die don't love their children as much as parents who have? Obviously not. What about philanthropists like Bill Gates, who have amassed vast fortunes and is now engaged in giving away 95% of it. Does he hate his children? Are they biologically entitled, in your view to 100% of his wealth? Is it his biological duty to pass it on to them? Does this act of philanthropy make him some sort of evil socialist bent on destroying the fabric of society and family as he know it?
On the issue of philanthropy - to those who say that if I have a problem with the concept of inheritance then it's up to me to donate inherited money to charity....Not really...That's a slightly different issue, I think. I could, of course, donate any proportion of my income or savings to charity, regardless of inheritance. Once I inherit the money, it just becomes mine, and I can do what I like with it obviously - including give it away. Again, I don't want to make this personal, but what I am set to inherit is not likely to be more than I have in savings or assets already - so if there is an onus on me to give to charity, then I think that is already there whether I inherit or not. The issue is with the perceived legitimacy of tax free inheritance in the first place (all my other income has already been taxed). I think that there is much more we could do to encourage philanthropy in general (and most people would agree, apart from the people who think that philanthropists are selfish socialists - which doesn't make any degree of sense to me). At the same time, I also have slight difficulties with the notion that we, as a very affluent country, still rely on charities to fill crucial gaps and provide basic care and facilities for some people. The balance between what should be done by the charity sector and the state is obviously complicated, and another debate entirely, so I'd prefer to leave that issue aside and keep the focus off the personal recipient of the inheritance, and stick to the concept of inheritance itself.
To those who have said "None of your business"! I think we are all allowed to have abstract discussions about financial transactions and the tax systems and financial conventions of the society we live in.
To those who say "Life's not fair". Um...quite. But as societies we have done quite a lot, over hundreds of years, to mitigate that and safeguard people from life's unfairness. I hope that's not what you would say to the victim of a robbery. Or someone who has been defrauded. Shrugging and saying "life's not fair" isn't really a solution to anybody's problems, I don't think.
Some people seem to disagree with inheritance tax at all. Maybe they disagree with income tax too. Perhaps they disagree with insurance. I don't know how far they want to push this, ultimately. They might not be satisfied until we live in some Mad Max style world - battling it out in the Thunderdome while the crowd chants "Life's Not Fair".
To those who have said that human beings are ultimately selfish and that human nature is intrinsically self interested. I don't think it is. I think that some human beings are selfish, and that they just presume that everyone else is too.
Juggling that "In a meritocracy who looks after the vulnerable and even the less able ? Seems a good thing to me that wider concepts of caring for one another including within families are also strongly at work in our society." I think this is a very good point. I think that dependents should be able to inherit - dependent children as well as adults who are financially dependent on their families, for reasons of vulnerability, should inherit from their parents' estate.
To those who said that tax avoidance is a far bigger issue - I totally agree. That's the No1 priority, in my view. I am just glad that conversation about the ethics of tax avoidance has now entered mainstream debate. A very small sign of progress.
On reflection, based on people's comments - I don't really have any problem with a modest tax free inheritance. But I think that the current threshold is probably too high. In 2011/2012, only 19 000 estates were taxed - under 3% of inheritances in the UK. I just think it's bizarre how much energy and attention goes into debating what the top income tax threshold should be - 45% or 50% - or whether 'high earners' should get a piffling amount of child benefit - and yet we barely question the ethics of passing on 300K absolutely tax free - and taxing inheritance above that at 40% when income tax is even higher.
In general I would say I was for a) lowering the income tax threshold, given that only 3% of estates are subject to it at all
b) more progressive taxation about the tax free band
An interesting idea might be for inheritance to be taxed at the same rate as the recipient pays income tax (averaged over the last X number of years). It is income, after all. Why a special 40% flat rate?
I'm sure I've missed lots of people's great points here, but this is already very long and I have to go for now.