To think inheritance tax should pay for social care

[Wouldloveanother]

Just that really. Saw somebody else mention it on here and I think it’s a brilliant idea!

We also need to tax wealth in the same way as income otherwise we will have more & more inequality

No it's not, only savings and liquid assets.

I think it should be, perhaps a charge is put on the house

Are all the folk who are so firmly opposed to a tax on 'income people have already paid tax on' also campaigning to abolish VAT?

Same principle (albeit with a much more regressive impact.)

People who are anti-IHT but pro-VAT often strike me as being quite transparently pro-inherited privilege and economic stratification.

True dat!

I believe the limit for inheritance tax should be 0 with no primary residence exemption and taxed at up to 100%. If you want to give your children money before you die to avoid this or care costs then you are literally left on your own. I believe in meritocracy unearned income via inheritance or House prices increases should be taxed very heavily.

Why should you pay IT though full stop. Your house, your business, your luck if it's gone up in value.

At the time of death, you cease to exist - you have no belongings and no rights in law. IT is a tax on the unearned benefits that the deceased benefactors inherit.

This exactly.

I don't quite understand how this would work though? For residential care, it wouldn't be unusual for the time in residential care to completely wipe out the proceeds of the house sale. So IT would mean mess money not more. Or do you mean that IT all goes into a central pot and that's where the government funds social care from?
Sorry if I'm being dim!

At the moment, if your homeowner parent lives to the age of 80 in decent health and then dies rapidly from cancer over the next 6 months you inherit a fortune tax free (up to a million quid free from IHT).
If their next door neighbour contracts Alzheimer's aged seventy and requires full time care then their children might inherit virtually nothing. Inheritance is a total lottery.

IMO it's better for both families to pay a sizeable lump sum on death and in return gain the certainty of maintaining the bulk of their inheritance.

Central pot, the way I see it.

In some ways it would be better to stop taxing the estates and shift the tax to the recipients, who would then pay tax on it as either a capital gain or income. Capital gains, for choice.

It would help shift the narrative from 'taxing what someone has worked hard for (or not)' to 'taxing a windfall that someone has done nothing to earn.'

I don't know what OP is thinking but in my plan, people who have money/properly pay for their own care. Where that's care in their own home, that could be by way of a loan that's cleared when they die/the house is sold.

People who are fortunate enough not to need care and therfore die with their estate still in tact, pay more inheritiance tax to contribute to the overall all social care bill.

You’re on fire @Explaintome i think that’s a really good idea as well! Frankly I would be open to anything which doesn’t further penalise working families to subsidise people who outright own a £800k house.

It would help shift the narrative from 'taxing what someone has worked hard for (or not)' to 'taxing a windfall that someone has done nothing to earn.'

It already is, hence the name Inheritance Tax!

I think the biggest issue is sorting out the housing. We don’t have enough houses for the people here, which leads to house price inflation and ultimately people benefitting if their parents have property. This is really only an issue because the value of the property has increased out of line with other costs. Affordable housing should be a right for everyone and if there wasn’t such a shortage property values would fall.

ive paid a massive amount of tax, worked since I was 12, and haven’t been able to help
my children as much as I’d have liked to. I want anything I’ve worked hard for to go to them and any grandchildren, not get put back into government coffers

But because the estate as a whole is taxed, not the recipient, it enables the idea that something that has already had tax paid on it (even if it hasn't) is being taxed. And it does not take into account the personal financial situations of the recipient/s.

Shifting to taxing the recipient/s, taking their existing tax situation into account, would rightly put the tax emphasis on the person/people who benefit.

(I'd also bring in graduated rates of capital gains tax.)

^ive paid a massive amount of tax, worked since I was 12, and haven’t been able to help
my children as much as I’d have liked to. I want anything I’ve worked hard for to go to them and any grandchildren, not get put back into government coffers^

But I assume you're cool with any unearned element of your estate to be appropriately taxed as a windfall?

Are you equally up in arms about VAT?

So it would go in the category of a large house. Someone owns a large house that someone else thinks their entitled to. They're not. Very simple.

What on Earth are you talking about?

Well if it does come to that we'll start giving the kids even more money now, do equity release on our home and have a fantastic retirement because there's fuck all incentive to pass anything on when we die after working hard and saving for years.

The incentive will be good quality care in your old age.

Inheritance tax in France is 60%, starting from zero. I think thats a good level because it still lets people leave something but also benefits society. It also keeps house prices reasonable without massive inheritances fuelling giant deposits.

But if you have enough money, you can plan for that anyway.

Not and give it all away to avoid the possibility of inheritance tax.