Comments on: Emily Thornberry on abolishing inheritance tax

By: Honey Monster

Honey Monster — Mon, 21 Apr 2008 15:54:46 +0000

Whilst I understand the sentiment to “do away” with IHT and would certainly support it, it is here to stay at the moment. I cannot see any of the political parties totally abolishing it at the moment. They may raise the threshold, but I guess even that would be a blessing.

By: jdc

jdc — Sat, 18 Aug 2007 19:12:11 +0000

“Now, if we were to tax bequests as income of the beneficiary, your argument might start to make sense”

Happy to do that.

By: Jock

Jock — Sat, 18 Aug 2007 18:24:20 +0000

Property values are not “earned” by the occupiers of that property. Their locational value is created by others, the community around a site that makes it popular, often because of infrastructure expenditure. They increase because others need to use the location on which the current occupier has a monopoly.

So yes, do away with IHT - most other assets that one might have accumulated are, after all, wealth producing. But property values represent a transfer from tax payers, and especially those without real estate, to those with. Pay for abolishing IHT, and Stamp Duty, with Land Value Tax throughout the period a person occupies that location.

By: tim f

tim f — Fri, 17 Aug 2007 18:17:18 +0000

hold on, I just read the beginning of these comments; clearly not worth arguing with this person.

By: tim f

tim f — Fri, 17 Aug 2007 18:14:32 +0000

“If we are going to have taxes why not…”

Hold on, are you suggesting there’s an option where we don’t have any taxes?

Sam - Most inheritances might have been “earned” by the recently deceased, but most of the largest inheritances have been passed down from generation to generation for longer than anyone alive can remember. The recipients never knew the people who “earned” the money. Besides, the idea that vast inheritances have been “earned” is as questionable as the idea that vast salaries have been “earned”. A fat cat doesn’t “earn” more than a learning assistant, they’re just paid more.

Why have inheritance tax? Because it ensures more of a level playing field, and raises money for our NHS at the same time. All forms of wealth need to be taxed, not just income. (And you can guarantee that if inheritance tax was abolished, it wouldn’t be the rich paying more in income tax to make up for it, it’d be ordinary people paying more.)

By: Sam

Sam — Fri, 17 Aug 2007 16:30:14 +0000

jdc:

“Money people haven’t earned”?

Most inheritances have been earned - by the recently deceased.

“When they don’t need it”?

IHT has nothing to do with whether the recipients of the inheritance need it or not. The estate pays the same tax regardless of the financial position of the beneficiaries.

Now, if we were to tax bequests as income of the beneficiary, your argument might start to make sense. Of course, we’d also have to tax gifts from living people as income of the giftee, which I confidently predict would soon win a prize as the most evaded tax in history.

By: jdc

jdc — Thu, 16 Aug 2007 14:34:35 +0000

“If we are going to have taxes why not be totally up front and raise the Income tax percentage and do away with Inheritance tax, at least that way everyone can see what tax they are paying. ”

Because taking money people haven’t earned away from them when they don’t need it is better than taking money people have earned away from them when they do need it?

By: Sam

Sam — Wed, 15 Aug 2007 16:01:55 +0000

Right - 6% of estates, which actually means more like 10 - 12% of families (most people are married, and pass their estates to their spouse free of IHT when the first one dies).

I still find it a peculiar tax - what justification can be made for differentiating between gifts by living people and gifts by dead people?

By: Mark

Mark — Sat, 11 Aug 2007 07:59:38 +0000

The Nil Rate Band threshold has now gone up to £300k from April 07. I think the 6% figure sounds very low, HBOS stated in the 2003/4 year an additional 25% of household will now paying Inheritance Tax. As an Will Writing and Estate Planning company we do not see many people who will not leave an Inheritance Tax liability for their family when they die. Any tax that is legally avoidable is not worth having and believe me Inheritance Tax is legally avoidable we help people to plan to avoid it all the time. As for reducing the value of an estate due to care costs I agree this does happen but being forced to sell the family home to pay for care costs should be criminal. I personally have seen several elderly people who this has happend to and I believe it has bee a large contributoray factor in their early deaths, as it causes a great deal of stress and worry. Again measures can be pit in place to help protect assets from the ravages of care costs by effective estate planning.

If we are going to have taxes why not be totally up front and raise the Income tax percentage and do away with Inheritance tax, at least that way everyone can see what tax they are paying.

By: Kevin drake

Kevin drake — Thu, 22 Mar 2007 10:36:56 +0000

Only 6% of estates pay IHT as many peoples wealth reduces by the time they die (paying for care is one reason!). Therefore it is not right to automatically think you will have to pay it. There are reliefs and remember it is only on the value ofthe estate above 285k. Therefore if the estate is worth 300k, the tax would potentially be just 6k, still leaving the beneficiaries a healthy 294k tax free.