Mog

Re. George Harrison and others. What gives the government the right to take 40% of anyones estate when it is willed to a family member, its not as if they didn't pay tax on their earnings when they were alive. Does anyone know the legal justification for inheritance taxation or does the government just do what they want......Rant over

Katana

Its a simple ploy to get rid of all the rich people in England or also a way to make them invest most of their assets overseas.

Phil

Yep

Must agree but doubt we are going to change it

RaZe-=Buzz=-

I was thinking EXACTLY that today...

You pay tax and NI on savings, the money you buy your house with etc etc..and when you die the *******s want more????

Thats all it is - a ******* tax.

I wonder how FEW times you would have to transfer/move etc a sum of money, say £1000, before you had NOTHING left cos you'd paid a grand in TAX? Any accountants out there tell me? Bit like Brewsters Millions - had to spend a million with NOTHING material to show for it. Could you do it in this crappy country

GM

Legal justification? Easy - the Inheritance Tax Act 1984.

Now, if you'd asked for the moral justification, that's the hard one

fast bloke

Mog - If you look at money very carefully, you realise that it can't chage hands very often without ending up in govt coffers.

Say you are a normal rate tax payer and get £1000.00 Chribmo bounus. You give 30% in income tax and NI (probably slightly more) to the taxman

You take your £700.00 to a toyshop and buy presents for your children. £122.00 goes to the taxman in vat.

The shopkeeper pays the person who served you £100.00 - £30.00 of this goes to the taxman. He gives £500.00 to his suppliers who pay it all in wages, giving £150.00 to the taxman. He pays himself the other £100.00 but as he is a higher rate tax payer he loses 40% on income tax (£40.00)

The £1000.00 has changed hands twice and the taxman has got at least £600.00 already. The other £400.00 has gone into salaries which is about where we started.

IHT is just another way of ensuring that the govt get a share every time the money changes hands. The good thing is that UK PLC will be 40 million better off so the 21 billion of public borrowing can be scaled back :NOT:

ju

i am an accountant and i think inheritance tax is the fairest tax there is, for starters you can gift money away or put it in to trusts when you are alive, these are either chargable or non chargable life time transfers bepending on how you transfer your wealth. then when you die there is the seven year rule, where you look back to previous transfers they becomse taxable once they exceed the nil rate band, about 250000. most people dont give their wealth away (due to poor tax planning) and any excess of assets over the nil rate band is taxed at 40%. prety fair to me as its only rich people who it gets. power to the people and equality to all!

GM

Sorry ju, don't agree - the people who pay IHT aren't the rich people. They do use all the tax planning opportunities so they don't have to pay it. The people who pay it are the people who can't afford to give assets away during their lifetime. So - is a tax that the rich can avoid but the less well off can't fair? I don't think so.

carl

Inheritance tax is, I guess, a way of taxing those people who are incredibly rich through family connexions.

For example, Althorp must be worth a few bob but I bet the Spencer's bought it in 1547 or whatever for like £600 or something. So there's 10s/100s of millions of untaxed value in there.

JFB

OK but if "Althorp" was passed on to say three different beneficiaries (non spouses) over say 50 yrs and the average value of the estate was £50 million - mostly land, buildings and heirlooms but little or no cash, each of the beneficiaries dies and passes the estate onto the next benificiary then three lots of Inheritance tax is payable. That is £60 million! Estate has to be sold and government gets it etc etc.

The IHT allowance of £250,000 is absorbed by a great deal of relatively "normal sized" houses depending on where you live so it isn't difficult to be unwittingly caught in the 40% IHT tax bracket today especially those who do not take professional tax planning advice.

I do think it's a terrible tax but one isn't around to argue when payment is due. If fact, I think it actually costs the Govt more to collect and administer this form of taxation compared to what they actually receive or maybe that's CGT? Any married person with a house or estate worth >£250K should consider including a nil rate band trust in their will to minimise one's family's exposure to IHT when the surviving spouse dies.

Not my area but just some observations in passing.

Cheers

Jerome