Inheritance Tax

The inequality lies here..........your grandfather worked his socks off which produced a good living standard for your father which he has been able to pass on to you

My grandfather pissed his money up against the wall and left my father with nothing so I have ended up with nothing

Its now up to me to break that chain of events and make sure that my children have a better quality of life - but in doing so I don't want to take anything away from your Grandfather, father or you.

I know some people can work hard all their lives and end up with nothing much to hand over to their kids - but that dosent take away the fact that you have no need to penalise the person who has been able to make something

 

Good point, those that generate wealth to pass on to their children have already paid more tax than those that don't work as hard. They shouldn't be taxed again on it.

 

They aren't taxed, they're dead. It becomes 'income' of the beneficiaries who haven't paid tax on it.

 

How many around here do these new proposals affect?

Hardly any.

This is a policy that helps rich people down south.

If you're looking for summat to complain about, try looking at the income tax you pay on the pension you saved up for all your life, rather than inheritance tax that kicks in only when you're loaded.

 

This

 

And this

 

Usually the tax is paid out of the death estate. That said, it makes little difference who's paying the tax. Inherit £100,000 and pay £40,000 in tax or inherit £60,000 because the tax has already been paid. Either way, the parents would have to earn more to leave the same net amount.

 

My dad always tells me an ace story. Taught in a nice bit of Sheff. 6th former in his economics class going on and on about people on benefits. What have they done to deserve being given money they did nothing to earn. So my dad says, yep completely see your point, that's why we should have a progressive inheritance tax. "that's completely different sir". Is it, is it really...

 

Policies aren't all about 'who is this going to help'. There's also got to be an element of what's fair. In my opinion, inheritance tax shouldn't be paid why the family home is passed on to your children.

You weren't taxed on income when you put it into your pension, it grew tax free and you get a 25% tax free lump sum. Can hardly complain about that.

 

Benefits are paid for from taxes that others pay. Your inheritance is paid for by your parents, who have also already paid tax on it. Of course its different.

 

The family home is not being passed on. The proceeds of its sale are being passed on more often than not.

A wad is thus arrived at not so much by the effort of the deceased as by living down south in an area where house prices have balloooned.

Your pension pot is summat you've saved up when you could have been reckless and spent it instead of saving. Yet you get rewarded by having it taxed.

 

Tax your parents have paid, not you. I suppose i just see society as paternalistic.

It does completely baffle me that of all my views those on inheritance and nationalising land seem to be the most controversial given that they would benefit the vast majority of (living) people and create a fairer society less determined by the accident of birth.

 

That's part of the reason I think inheritance tax should be replaced with capital gains tax.

The inheritance you intend to pass to your children is summat you've saved up when you could have been reckless and spent it instead of saving. Yet you get rewarded by having it taxed.

 

Those pesky spenders paying into society via vat, and helping the economy and that.

 

Tin hat time

Inheritance tax seems a bit of a misnomer more like unearned income to me

Seems to me that the people who benefit are the recipients of unearned income and this inheritance should be taxed as such ie at their marginal rate - if this takes them into a higher tax band then so be it.

Edit - Handed downwards (ie no tax for surviving spouse)

 

I kind of half agree. When a house is passed on, part of its value is the actual money put in by the owners when they bought the house, and the capital element of their mortgage payments. This has been paid out of income which has already been taxed. The rest of the value consists of the growth (if any) in the value caused by rising house prices. This is (as you say) unearned income and therefore I have no problem with it being taxed.

It's a bit like putting money in a savings account. The capital you put in is yours, and has already been taxed. If you draw it out it is tax free as it's yours anyway. Interest on the money is however unearned income and should be taxed as additional income.

 

For what its worth imho I belive it to be wrong but can I just say this a tax on the whole estate (includes Isa, bank accounts etc not just the home) these can be mitigated, even now by clever estate planning and placing various things in trust.

 

My kids were born in my house. They had birthday parties, christmas' a thousand good times.

The house - the memories and the in built familiness of it all means it is the one thing that should be sacred and completely exempt from any inheritance tax.

The family often was born, lived in, got married from and often died in one house. I don't care whether it's a 2 up two down in Grimey or Harewood house - that makes it special as an individual - as a human - not a monetary assett - I would expect any real socialist to see that.

All too regularly we see rich people moving into an area forcing up the prices of houses - especially in rural and coastal places - either forcing people into the inheritance tax bracket or pricing people out of their childhood villages. removing inheritance tax would at least offer some protection here.

I think making the family home exempt from inheritance tax is the most honorable thing any government could do - regardless of colour - but even though I'm naturally a socialist I won't whinge about a policy JUST because it's the tories bringing it in.

I can see it's a bloody good thing.

I appreciate that something along the lines of prooving residence of the inheritee or time living in the house must be done to prevent sandbagging in later years (maybe 7 years - maybe more plus the house cannot be sold for another 7 years or something similar (and also adding protection against incoming spouses taking the legacy in divorce too!))

As a general principle Milliband - instead of avoiding the inheritance tax on his own fathers house he should have thought about making it possible for all of us and maybe he'd do more of us a favour by being more electable.

 

My point may not have been clear. I didn't mean there aren't people who would like to live in their parents house once they've gone. I was saying that there aren't many instances where inheritance tax would stop it.

Firstly I imagine most would be prevented from doing so by not being the sole heir, which would usually necessitate a sale anyway and splitting of the proceeds.

Then, lets say they are the sole heir, there aren't that many people who would have to pay anything under the current thresholds.

And in the case of those who do trigger the threshold they could pay the tax from the sale proceeds of their current home.