To not see the problem with inheritance tax

[AgaPanthers]

"Millionaire lingerie boss Michelle Mone has called for inheritance tax to be axed to stop the government spending her money when she dies."

Surely it's better than the government spending her money while she's alive? I mean they have to get their hands on people's money one way or another, and if anyone doesn't need it, it's the dead.

"I work really hard every single day - like a lot of people - for my children and for my children’s future,’ she told BBC 2’s Newsnight.
‘I want them to have that little nest for their future and for their children, and I don't see why I, others should work extremely hard, pay your tax and then when you die it is like a double whammy."

I work hard for my children too, so that they have a good education and can make the most of their talents. But I don't really see why my grandchildren, for example, would need to receive my millions (if I had any!) untaxed.

Others seem to feel the same way, giving to charity www.news.com.au/finance/work/tycoons-who-wont-give-money-to-their-children/story-e6frfm9r-1226702468883, rather than enabling several generations of progeny to be idle wasters.

For the record, the IHT rate is 40% above £325k, but for a married/civil partnered couple, the allowance is transferrable, so a married couple can leave £650k (which is 32 years labour at the average wage.) entirely tax free to their children.

Please correct me if I am wrong, but isn't there a delay on minors paying inheritance tax?

I think I am thinking of trusts

perhaps you also don't see a problem with 6 people in this country having as much money as the poorest 12 and a half million people? Then those same 6 people can leave there wealth to their choosing and it be handed on without any thought to tax

the country would lose out, there would be 12 million people losing out even further and that is a small estimate on the amount of people it would effect.

we are not all in this together

and some will suffer far more than others

Can't help wondering whether the main beneficiaries of IHT are lawyers.

The thing about inheriting houses is that you are gifted a big, valuable asset. It doesn't matter whether the same sort of house will cost £80k, £800k or whatever; you previously didn't have £80k or £800k of wealth and now you do.

Passing wealth down the generations may be great for the individuals involved but isn't good for society.

merrymouse yes there is a delay - explained further up the thread

if they are living in the property in question.

You can't leave a property directly to a minor, I believe - you should have some arrangement with a guardian?

"perhaps you also don't see a problem with 6 people in this country having as much money as the poorest 12 and a half million people?"

I am not sure this is a fair comparison with my thought that I should be able to leave the flat to my children that we all live in without them being clobbered by IHT (which would happen). I am nowhere near "rich" bit it affects me. Sadly I am not the Duke of Westminster.

Minors cannot own real property (i.e. land and houses) - it has to be held for them on trust.

Passing wealth down the generations may be great for the individuals involved but isn't good for society.

I'm not really disagreeing with that. However, I think that increasing IHT would just encourage people to spend more money on their children when they are alive. It is very difficult to prevent people giving things to their children.

on trust or in a trust, worried, do you know?

I'll say it again... If you have that kind of money, in property or elsewhere, you are rich! Look at where you are compared to others. I consider myself rich and we don't have anywhere near the IHT threshold. We might when we've paid off our mortgage, that's fine by me.

I agree with the poster who suggested that civil partnerships should be available to all- it doesn't seem fair to me that only married people benefit from the double band. Although actually I wouldn't object to the removal of the double band altogether and replacement by some sort of life interest in property for spouses/children.

Marriage is basically a legal agreement. All the tax laws say "your spouse or civil partner". Any other ideas you attach to marriage are up to you.

I don't see how inheritance tax is good for society. Not at the threshold it currently stands at.

There are so many people struggling to buy their own homes at the moment, or in negative equity, or facing mortgages they will never fully pay off, if an inheritance can help give average working families a bit more financial security then how is that a bad thing?

You can leave the mega rich out of the argument, because even when they pay inheritance tax they will still be significantly wealthier than the rest of us.

But for those of us whose children will have to work to support themselves, with student debts to pay off and more limited work opportunities than they had in the past, I honestly can't see why it's such a bad thing for them to have a little help in the form of inheritance. Especially when that help isn't likely to come until they're older and they've set themselves up in life with a huge amount of debt.

How is it taking anything away from anyone else?

My tax advice is downsize your house when your children leave home and keep the rest of your cash out of the hands of the tax man by spending it on Cornish pasties, but only ones that are hot from the oven.

Increasing the inheritance allowance to £1m would be choosing to give a tax cut of £270,000 to someone currently receiving an unearned £730,000. To give a sense of scale, 82 median earners could be taken out of income tax completely for the same cost.

Given tax has to be paid, should we really be giving hundreds of thousand of tax cuts to rich dead people?

As to raising it to £2m, surely no one deserves a £670,000 tax rebate!

I think it also comes down to the fact that sometimes tax isn't about taking money where it is fair but taking it where it is available. Dead people don't need money, living people do.

If you don't want to pay inheritance tax would you like your children to pay more income tax?

The shortfall would have to be made up somehow. By taking money from someone else (someone who is earning their income). So those people would suffer a double whammy - they see people who have done nothing at all to deserve advantage, being given advantage, and they themselves are the ones paying so that can happen.

But WooWoo they can have help. Tax just has to be paid over and above a sum that is way beyond what the vast majority of people have to leave. If you have that amount to leave you ARE 'significantly richer' than the majority.

"Marriage is basically a legal agreement. All the tax laws say "your spouse or civil partner". Any other ideas you attach to marriage are up to you."

But you can't enter a civil partnership or marriage with a sibling, merry.

And marriage does include various promises of love and fidelity which people may feel unconfortable with if they don't mean them.

I'd say that the moral case for income tax us for more dubious than the case for IHT. It's not better for a chunk of the money people work to earn goes straight to the government than that a chunk of the wealth someone leaves behind after death is taken in tax. Anyone benefitting from the inheritance is still better off than they were before they received it.

It isn't good for society that some people get a windfall that makes them more secure while huge swathes of people can never get that. Yes it's nice for the people that benefit, but plenty of others don't. Their lives don't become less precarious because someone else got a windfall.

In any case, DH and I are likely to receive any inheritance (although I'd like to think our parents will spend as much as they can while they're alive) in our 60s (or later). That's hardly supporting young struggling families with precarious lives!

"In any case, DH and I are likely to receive any inheritance (although I'd like to think our parents will spend as much as they can while they're alive) in our 60s (or later). That's hardly supporting young struggling families with precarious lives"

Yy, same here. If all the recipients agree you can look into a deed of variation though to give some to the next generation down.

Problem is a lot of older people don't spend. I've never met a more miserly bunch of people when it comes to money. Always saving, penny pinching and generally acting like rationing is about to come back.

The only thing you need in life is income every month. Capital and lots of it is just a number as it never gets spent.

People always approve of taxes that don't affect them.

The IHT threshold of £325,000 is insufficient to cover a modest family home in most places in the country.

More and more people will get upset about it as they realise it's going to affect them.