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Replace Inheritance Tax with a Gift Tax?
Continued....ExpressInheritance tax should be abolished and replaced with a new tax on gifts to individuals over £150,000, a leading think tank has urged.
The Institute for Public Policy Research (ippr) said there was a strong case for switching to a more "progressive" system, claiming it would tackle tax avoidance by the super rich as well as reducing wealth inequalities.
Its report suggested taxing bigger gifts - those over £450,000 - at higher amounts, up to a maximum of 40%, down to 20% for those worth between £150,000 and £300,000.
A capital receipts tax on gifts above £150,000 would raise £1 billion more revenue than inheritance tax does now, said the report.
Nick Pearce, ippr director, said: "Inheritance tax has historically played an important progressive role in our tax system, but it now raises only £2.2 billion from a dwindling number of estates.
This is merely a proposal from a think tank. No one in government is even suggesting this. Whether the Government would ever even consider this I don't know. What do you all reckon?
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I know
But as there's only 10 minutes left - I'll say Merry Christmas
So if we abolish inheritance tax, we'll have one group who'll inherit sums that allow them to never work again in their lives, and another who'll continue to work their arses off, but get taxed to the ground for doing so.
How does that punish success and reward failure exactly?
I'm not sure how being given large sums of money by your dead parents encourages people to make a success of themselves. If the parents want their children to have money without working for it, then give it to them while you are still alive. If you want to keep it all for yourself in your own life-time, then either you don't think they need it, or you aren't that bothered. By the time most people die, their children already have their own homes, so inheriting another one isn't all that useful.
They're dead! It not being taken away from them. There's a lot of less 'fair' taxes out there than this proposed one.
It just seems like a tax on dying which leaves me uncomfortable - raising money from the dead
Well my income tax is being taken away from me monthly and I cant afford accountants to find tax loopholes or deposit it in some tax-free bank so its annoying me. At least this proposal would happen at a point when I wouldnt be in a position to give a damn
Taken away? They never had it, the deceased did. Nor did they earn it. They deceased did. Maybe you'd welcome a society where wealth becomes increasingly concentrated in fewer and fewer families*, I for one wouldn't.
*e.g. paid up BTL properties portfolios being handed down, meaning the recipient is not only free to never work again, but has the leverage to acquire more and more property.
It is they intended it to be left to whoever they left it too, not the taxman.
well in that case lets just scrap tax and we'll all just have to rely on ourselves to do all the things tax pays for.
particular governments may not 'earn' it but the NHS, education and other public services require it to function.
Ahh, so you're in favour of abolishing tax? Then surely you should campaign for the removal of income tax and national insurance, taxes that directly punish effort of the working individual. IHT should be way down your list.
IMO we should raise VAT on luxury items and abolish inheritance tax (or at least reduce it and raise the threshold it has to be paid at to £1 million) and tax on savings.
There's some massive logical blackholes in your argument. How on earth can a dead person be "taxed again". They're dead!!
And again, you question the right of the government to take earned money, when in the case of IHT, the recipient did nothing to earn that money. You should therefore be arguing for an increase in IHT to allow a reduction in income tax - a true tax on effort.
Anyway, the person who paid income tax is not paying tax twice. The person who didn't earn it, but inherits it will pay tax on it for the first time, much like they would if they had actually earned it. Saying you are paying tax on money already taxed could apply to employees being taxed on their salaries as companies pay corporate tax, and their customers have paid VAT on the goods provided, not to mention paying tax when they earned the money in the first place.
To me it makes sense that tax is payable when you come into a large amount of money. Inheritence tax is not relevant to the children of a couple who have £10,000 of savings when they die. When they have more left to give away, it isn't paid on the money under the thresh-hold. Who on earth needs to be able to inherit £1 million pounds tax free? How is it unfair for those who get given very large sums of money without doing a thing to earn it, to pay tax on it?
Absolutely not. I believe earned money belongs to the individual first and the state is way, way too big. However, IHT for the recipient is not earned money.
Do you believe in the family as a unit, or a collection of individuals, no different to any other random individuals?
Should couples be allowed to have joint bank accounts?
The family is a social construct.
You are investing it with magical properties that do not belong to it.