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Post by steppenwolf on Nov 21, 2023 8:27:26 GMT
Inheritance tax should be cut if not abolished. Our threshold is way below much of Europe, let alone the US and hasn't kept pace with inflation. As ever, it's a tax on the poor since the rich have numerous ways to avoid it. For most, inheritance is only payable on estates over £1m. Bit of a stretch to call it a tax on the poor. That's a common misunderstanding, dappy - and also technically wrong. Single people start paying IHT at £325,000, which hasn't changed for decades. But the real point is that the tax is effectively being levied on the beneficiaries of the will of the person who has died. And these beneficiaries may not - and usually aren't - rich. IMO the most sensible change for this tax would be to levy tax on inheritances at the rate that the beneficiaries are paying. That's more "fair". Unfortunately it would further complicate the tax system and I can't see it ever being done. But a good compromise would be to tax the money at 20%, since that's probably the rate that most beneficiaries are paying. The loss to the Exchequer would be quite small (a couple of billion). The trouble is that it will run into the usual bollocks from the Left who will call it "giveaways for millionaires" - which it isn't. It'll be like Truss's budget where she was to abolish the 45% tax rate. The cost of this was virtually nothing - in fact it may have netted more tax - but the Left made a big fuss about it. The 45% rate was one of Gordon Brown's scorched earth policies just before he got the boot. He knew it was pointless and probably counter-productive but he also knew that the Tories would have great difficulty getting rid of it. It was a booby trap the Truss fell into. |
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Post by sheepy on Nov 21, 2023 8:49:52 GMT
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Post by dappy on Nov 21, 2023 9:16:52 GMT
For most, inheritance is only payable on estates over £1m. Bit of a stretch to call it a tax on the poor. That's a common misunderstanding, dappy - and also technically wrong. Single people start paying IHT at £325,000, which hasn't changed for decades. But the real point is that the tax is effectively being levied on the beneficiaries of the will of the person who has died. And these beneficiaries may not - and usually aren't - rich. IMO the most sensible change for this tax would be to levy tax on inheritances at the rate that the beneficiaries are paying. That's more "fair". Unfortunately it would further complicate the tax system and I can't see it ever being done. But a good compromise would be to tax the money at 20%, since that's probably the rate that most beneficiaries are paying. The loss to the Exchequer would be quite small (a couple of billion). The trouble is that it will run into the usual bollocks from the Left who will call it "giveaways for millionaires" - which it isn't. It'll be like Truss's budget where she was to abolish the 45% tax rate. The cost of this was virtually nothing - in fact it may have netted more tax - but the Left made a big fuss about it. The 45% rate was one of Gordon Brown's scorched earth policies just before he got the boot. He knew it was pointless and probably counter-productive but he also knew that the Tories would have great difficulty getting rid of it. It was a booby trap the Truss fell into. Its a common matter of fact, not a common misunderstanding. If the death is the second of two married people (still the majorty) and the beneficiaries are their children or grandchildren, inheritance tax is only payable on estates over £1m. On an estate worth £1.2m, inheritance tax would be £80k - about 7% of the estate. Two children may not be rich beforehand but with an inheritance of £560k each they are certainly heading in that direction now. On an estate of £2m, inheritance tax would be £400k, just 20% of the estate. Each of the two kids inherits £800k. Most people would consider them now rich. Inheritance tax is a tax on dead millionaires. It is quite shocking that the Tories are even considering it in the midst of a cost of living crisis for less affluent people. |
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