Cape Blue

Hi Zoe13

the reasons I think that inheritance tax is a good tax are varied

(1). We all have to pay a certain amount of tax in our lives - some are more financially successful or lucky and will have to pay more than some who aren't, but we all have to pay a certain amount to contribute to the running of a country.

The way I see it is that the timing of ones tax contributions is as significant as the amount one actually ends up paying.

One could pay more tax in ones 20's when perhaps one is struggling with university debt and just starting out in life.

One could pay more tax in ones 30's just at the time one is looking to buy a house and start a family.

40's - young expanding family, needing to tuck some money aside into pensions and ready for kids education, perhaps larger house.

50's - more pension, kids in uni, few more holidays

60's - kids need help onto housing ladder, aim for retirement

and onwards

OR, one could pay a chunk of ones lifetime tax contribution when one is dead! This seems to me to be a great time to pay a lump of ones tax liability, certainly a far better time to pay it than in ones 20's to 70's as above.

(2). I believe in a progressive tax system that has checks & balances to prevent too much of a disparity between exceptionally rich and exceptionally poor. This doesn't mean that I have a problem with very wealthy people - good luck to them and the more the merrier, but I do think that if we allow a system where 100% of the wealth is passed down generation to generation we will quickly produce an overclass and an underclass which is not healthy for society. Its is obviously not healthy for those born in the gutter, however as a group it isn't healthy for the wealthier either as there will be increased social strife and security costs. This is the sort of thing that produced the great estates in the UK with the poor begging in the roads beside them.

It creates a society that moves from a potential meritocracy to an aristocracy.

(3). I am not sure who an inheritance tax harms - the person whose money it was is dead (so they have other issues), if they were married then there is no tax for the spouse, if there was no spouse the money is going down to the kids (for example). For the kids it is a free money windfall - they have done nothing for it, not worked, not taken risks, not studied, nothing.

If the estate was worth say, 1/2 million quid, then taking out the first 300,000 leaves 200,000 to be taxed at 40% leaving a tax bill of 80,000. Or to put it another way the kids get a free cash windfall of 420,000 for doing absolutely nothing - 84% of the total. I find it hard to believe that anyone can complain about this sort of windfall when many in society grow up without either parents or capable ones.

Texas_Dave - if the spouse is still alive then there is no tax to pass the house onto her, if the kids are inheriting then as JAJ says the house is almost always sold as the kids live elsewhere and they want to divide the spoils between them.

If inheritance tax means I can pay part of my lifetime contribution when I am dead, helps ensure a fairer society, and does no harm to anyone (i.e. kids) as they haven't done anything for it, then it seems to me to be a good tax and one which we should continue with.

Sorry that's a bit long.

joto

I don't think it might be the amount of taxes, but the way in which taxpayers money is spent. A lot of money is wasted on stupid schemes and such like that benefit nobody or very few. Road tax for instance is not going to improve roads or the public transport system the majority of the time, so where is it going. I think there should be more accountability on the governments part as to what exactly they are doing with taxpayers money.

JAJ

Schools and hospitals?

zoe13

cape blue

i like your way of saying that dead people have 'other issues' than worrying about inheritance tax, very true!

i would like to see some sort of balance sheet as to where all these taxes are going. i guess maybe the 'problem' i had with the notion of inheritance tax is that you get taxed all your life, why do you effectively get taxed again when you have the audacity to die! yes house prices go up, often without people needing to do anything to them, but you can't stop that in a capitalist society. maybe the cut off needs to increase more readily to reflect house prices.

i mean, if i worked hard, paid my taxes, saved up, bought a house, paid the motgage, paid my taxes, paid my loan, kept the house, paid my taxes, paid my mortgage, worked hard, got a promotion, paid more taxes, got a bigger house, paid health insurance, paid taxes etc etc ad nauseum... then why shouldn't my kids have a house to do with what they want? i would have paid all my taxes based on my salary, paid my student loan, paid road tax blah blah, as a law abiding citizen would, and why then get whacked just because house prices have gone up, which is beyond my control?

that is what i have always thought anyway.

cape blue, thank you for your reply. many people may have shot me down for asking, whatever their standpoint cos that is what BE seems to be now - but again thanks for the patient and honest reply karma man x

HiddenPaw

There is no such thing as road tax. You're probably thinking of Vehicle Excise Duty and it's a licence to use a motorised vehicle on a public road. As for roads themselves, this is funded from the public purse.

Pony

I don't follow your logic. Why should a home have to be sold, regardless of how many children are involved. Why should proceeds from the sale be taxed?
What if the home is of historic interest, and has been in the same family for hundreds of years?

Pony

Your missing the point. Some homes are of historic interest, and have stayed in familes for hundreds of years. The house is almost always sold because you have to sell it to pay the inheritance tax, my point exactly.
I am not necessarily talking about great big manors and country estates - I am also talking about the poor farmers who work the land with their children. Once both parents die they lose the farm, livelihood and all. I am sure they don't see it as 'dividing the spoils'. Generations of tradition wiped out.

Scout

No matter the country.............people are going to bitch about taxes. Unfortunately they are a necessary evil. Taxes help to run and maintain whatever country you live in. It would be great if we never had to pay them and still had good police and fire, great medical providers, trash collectors, paved roads, etc.....but it ain't gonna happen.

Cape Blue

I'm sorry Texas but I would imagine that 99.9999% of houses are not of historic interest nor have been in the family for hundreds of years.

I also don't see too many poor farmers, except those who are tenant farmers who don't own the property regardless.

When both parents die the kids inherit a shed-load of cash that wasn't theirs and they didn't work for. If they are wedded to the farm they should get a mortgage on it like most others have to do. As in my example of the 1/2 million pound estate they would need to find 80,000 to continue in ownership.

If the estate is in the millions then they will inherit millions so I find it hard to be too sympathetic if they have to "sell the farm" to obtain the millions - many people grow up in Council flats with deadbeat parents, no inheritance and few options in life.

I don't really know what you mean by generations of tradition wiped out. Tradition would be sowing the harvest by hand out of woven baskets wouldn't it - not using the latest john deer.

Pony

Breeding livestock is a tradition, animals bred to refine the breed. I've never seen a John Deer cover a mare . . .

ladylisa

Going back to an earlier point about the numbers of people wanting to emigrate I bet if you asked anyone in the world if they wanted to live in another country 9 times out of 10 they would say yes. Moving abroad sounds so glamorous compared to most peoples every day lives. However the reality is that most people are content really they just dont often realise it...(some until its too late.. )

Sally

Exactly

BAY

'some are more financially successful or lucky' ... how about some work harder than others ... or .... some don't p*ss it up against a wall ie. some don't spend it all on booze and fags etc. Why should then then be taxed more

Pony

Karma sent

Cape Blue

They are not really being taxed more though - they are dead, so it has no effect on them whatsoever. It is the beneficiaries who are getting less free money than they would otherwise.

Yes some are more financially successful or lucky - many people work hard in their lives but don't make a lot of money as they didn't have a parental leg-up at the right time (not lucky) or did not choose the right professions and make the right financial decisions (not financially successful).

Most people will fall into IHT based upon the spectacular rises in property value - this has little to do with working hard and not spending ones money on booze & fags and has a lot to do with fortunate purchase timing and sometimes inheritance from parents/grandparents.