This 50p tax rate
Comments
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Urgh.
If someone (living) signs their house over to a family member and they sell it at a profit and taxed, fine. If they die and leave something behind and are immediately taxed on the value of the estate that, in my mind, is frankly disgusting.
How do you define earned and unearned. (Really should have been my question). To some the very close genetic relationship equates to 'earned'. For others it could be the closeness of the relationship between parent and child. I think it is somewhat arrogant for those of you to look at this and simply fall upon 'unearned income'. How do you know?Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
rjsterry wrote:Heh, is there such a thing as a bleeding heart conservative?
As I said before, I'm not suggesting that there's no need for some adjustment to the threshold, but that's different from saying that the whole concept is flawed. We are also talking about a small percentage of a minority that fits your scenario. To extend your example, if the parent is in their 40s then they will more than likely still be paying off a mortgage, so IHT, will be some way down the list of priorities unless they have sorted out sufficient life insurance.
The "threshold" should be adjusted by house price inflation - no question.
And the exceptions should include spouses, partners, children, dependents - in other words pretty much anyone. If that were the case, I'd be content. But then there would be no point in having IHT at all.
I agree and accept that the scenario I outlined includes a limited number of people - but that doesn't detract from the "wrongness" of such a tax. There are plenty of other similar scenarios.
I think it equally objectionable to have a tax that is easily avoided by those who know/understand these matters, but not by those who don't consider themselves "rich" and have little or no idea about tax mitigation schemes. That really doesn't seem fair to me.0 -
Clever Pun wrote:rjsterry wrote:so IHT, will be some way down the list of priorities unless they have sorted out sufficient life insurance.
It's a legal requirement of having a mortgage isn't it? Life insurance is required so the banks can get their money back.
Just reading the last couple of pages here and the debate falls into two categories as I see it. Slightly older posters or thos who have sadly lost family members and had to deal with the government clawing at you while you're grieving. The otherside seems to be younger and more idealistic...
Firmly in the shouldn't be taxed twice camp personally, the rest of the baggage that comes with that is looming
Yes, you have to have a minimum level to pay off the mortgage, but you can (and probably should) take out more than this to cover other costs and provide for any offspring/partner. Not sure which camp I fit in, but from my experience, I'd say that getting your affairs in order makes life a lot easier for your successors.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
I once interviewed for a job that was solely based on encouraging people to donate part of their estate to charity as part of their will to avoid inheritance tax.
Other than that, W1 is more capable of arguing my perspective on this than I am so I'm going to leave it to him/her.
It does frighten me that more and more we seem to be agreeing on a lot of things. I don't think I'm as Tory blue as he/she is though.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
You are Tory though aren't you.
Go on: Thatcher, Major or Cameron. Pick one?Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
DonDaddyD wrote:To some the very close genetic relationship equates to 'earned'. For others it could be the closeness of the relationship between parent and child. I think it is somewhat arrogant for those of you to look at this and simply fall upon 'unearned income'. How do you know?
That's just a bizarre argument“New York has the haircuts, London has the trousers, but Belfast has the reason!0 -
TailWindHome wrote:DonDaddyD wrote:To some the very close genetic relationship equates to 'earned'. For others it could be the closeness of the relationship between parent and child. I think it is somewhat arrogant for those of you to look at this and simply fall upon 'unearned income'. How do you know?
That's just a bizarre argument
No it isn't.
You said in the context of gaining an inheritance:TWH wrote:For the beneficiary it is 'unearned income',there's no reason of morality for it not to be in the scope of taxation.
I'm asking, how you define or even qualify 'unearned'?
In my family simply being my child means that they have earned the right to my Estate. They can lose that right as nothing is absolute. But the starting point is that they have earned it.
Who are you to tell me that to my child my possessions are an unearned income?
Similarly my Grandfather has many children from many relationships. My father is his official signatory. My father above all others earned that right. Should my Grandfather leave his Estate to him has he not earned it.
Now my Father could have spent his life not working, not doing anything but avoiding being a functioning part of society (not the case). The only thing he did right was selflessly look after his Father (my Grandfather) and so is left a considerable Estate. Has he not earned it?
Who are you to determine that it is an unearned income?
And that's the point, to me there is no greater connection than that of parent and child/siblings/husband and wife. For an outsider to cast their gaze and impose their own opinion (an 'unearned income') is as vulgar and as wrongfully intrusive as the inheritance tax.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
DonDaddyD wrote:TailWindHome wrote:DonDaddyD wrote:To some the very close genetic relationship equates to 'earned'. For others it could be the closeness of the relationship between parent and child. I think it is somewhat arrogant for those of you to look at this and simply fall upon 'unearned income'. How do you know?
That's just a bizarre argument
No it isn't.
You said in the context of gaining an inheritance:TWH wrote:For the beneficiary it is 'unearned income',there's no reason of morality for it not to be in the scope of taxation.
I'm asking, how you define or even qualify 'unearned'? In my family simply being my child means that they have earned the right to my Estate. They can lose that right. Nothing is absolute but the starting point is that they have earned it.
Similarly my Grandfather has many children from many relationships. My father is his official signatory. My father above all others earned that right. Should my Grandfather leave his Estate to him has he not earned it.
Now my Father could have spent his life not working, not doing anything but avoiding being a functioning part of society (not the case). The only thing he did right was look after his Father (my Grandfather) and so is left a considerable Estate. Has he not earned it?
Who are you to decide that it is an unearned income?
I think the earned/unearned distinction is a red herring both are taxed in a variety of ways. Lots of things are taxed 'more than once' too. Neither are exclusive to IHT.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
rjsterry wrote:I think the earned/unearned distinction is a red herring both are taxed in a variety of ways. Lots of things are taxed 'more than once' too. Neither are exclusive to IHT.
Yes and of those I'm sure we could argue them on a subject by subject basis. However,, simply because there are other examples it doesn't immediately justify the existence of an inheritance tax.
My previous point was that the concept/opinion of 'earned and unearned' holds little relevance in regards to inheritance tax when the decision and rationale behind who inherits what is such a personal one.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
All this talk of estates being left will kindly be taken care of by the Government over the next few decades. As people become unable to look after themselves their assets will be used to pay for their care. To me this is an even more disgusting "tax" than what is being discussed here. I expect that large numbers of people will find themselves getting nothing from their parents' passing because the state will have already taken it to fund their care.0
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Reference please?
There is a growing issue. On average we live longer, a lot longer. The cost and demand for end of life care has risen exponentially. It is arguably the fastest growing form of care in the NHS (so I'm told). Delicate issue and no one really knows what to do. That the majority of people can feasibly work well into their 70s now or expect to live some 30 years after retirement, society isn't shaped to support this - a big issue with pensions/savings/property/provisions of care.
Not saying I agree with whatever has been so far proposed just pointing out the concerns in that area.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
DonDaddyD wrote:In my family simply being my child means that they have earned the right to my Estate. They can lose that right as nothing is absolute. But the starting point is that they have earned it.
Having a claim to the estate isn't the same as 'earning' the income.
Neither means that they should necessarily get it tax free.
There is nothing immoral about inheritance being taxed. There are plenty of examples where it could be harsh or seems unfair but 'thems the breaks'.
On the plus side you get your full personal allowance in the year of your death.....this means it is more tax efficient to die in the first couple of months of the new tax year.......“New York has the haircuts, London has the trousers, but Belfast has the reason!0 -
TailWindHome wrote:On the plus side you get your full personal allowance in the year of your death.....this means it is more tax efficient to die in the first couple of months of the new tax year.......
You see clever accountants finding ways to avoid tax - it's as bad as the EDL or Uncut protestors coming over and speaking all hurdy gurdy and I didn't vote for the Euro anyway.
Or am I in the wrong thread?Fixed gear for wet weather / hairy roadie for posing in the sun.
What would Thora Hurd do?0 -
You put forward earned or unearned. I challenged how you qualify that in the context of an inheritance. An inheritance isn't an income in the first place so that word is moot. The remaining issue is whether it is earned or unearned - whether an individual believes they have a claim to it or not is irrelevant. If the owner of said Estate believe person A has earned it, then it is theirs to determine that.
"Thems the breaks" I would argue precedes immorality as the term implies acceptance over and above any mitigating circumstance such as morality. As I said before morality is a key factor in deciding legislation/laws/rules as they need to be 'just and fair'.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
DonDaddyD wrote:You put forward earned or unearned. I challenged how you qualify that in the context of an inheritance. An inheritance isn't an income in the first place so that word is moot. The remaining issue is whether it is earned or unearned - whether an individual believes they have a claim to it or not is irrelevant. If the owner of said Estate believe person A has earned it, then it is theirs to determine that.
"Thems the breaks" I would argue precedes immorality as the term implies acceptance over and above any mitigating circumstance such as morality. As I said before morality is a key factor in deciding legislation/laws/rules as they need to be 'just and fair'. The real issue is whether inheritance tax is 'just and fair'.
An inheritance is a form of income or gain in the same way as your salary, your bonus, interest on your savings, dividend income, profit from trading or pension.
There is no moral reason for it not to be taxed.
It is both just and fair.
Or more specifically it's neither unjust nor unfair.
You seem to be locked into the subjective definition of earned. I'm not really sure why. Ownership of assets has passed from one person to another. It's taxed. There's no moral issue here.“New York has the haircuts, London has the trousers, but Belfast has the reason!0 -
Am I right in thinking that even if you still live in that home you could be forced to sell it if you don't have the spare cash to pay the IHT.rjsterry wrote:Sure there's the scenario where Mum finally pops her clogs after a last few happy years in a Sussex cottage bought in the '50s and in which Mum's offspring were raised. Because of the overinflated property prices in the SE, said cottage is now worth, say £450K, so IHT of £50K is due (40% of £125K). Offspring don't have a spare £50K, so have to sell 'the family home'. Mind you, they do get the remaining £400K (less costs) to split between them.
I know it's difficult to have to sell off part of their family history, but people have to do this below the threshold as well, when they just need the money or have no use for the property. BTW, at least 75% of properties in the UK would fall below the IHT threshold.0 -
suzyb wrote:Am I right in thinking that even if you still live in that home you could be forced to sell it if you don't have the spare cash to pay the IHT.
I think if your still living in the home it would be wise to move the house to your name, I think this needs to be done a few year before the death of the parent but it was advised to my parents to do it sooner rather than latter when they where making out wills.Commuter: Forme Vision Red/Black FCN 4
Weekender: White/Black - Cube Agree GTC pro FCN 30 -
As the baby-boom bulge passes through to retirement there will be huge costs providing care. What is the better alternative to having them fund it if they have the assets? Increase the tax on those still working?squired wrote:All this talk of estates being left will kindly be taken care of by the Government over the next few decades. As people become unable to look after themselves their assets will be used to pay for their care. To me this is an even more disgusting "tax" than what is being discussed here. I expect that large numbers of people will find themselves getting nothing from their parents' passing because the state will have already taken it to fund their care.0 -
TailWindHome wrote:
An inheritance is a form of income or gain in the same way as your salary, your bonus, interest on your savings, dividend income, profit from trading or pension.
An inheritance is a gift. (Traditionally given by one person upon their death to another person). This I believe to be different in legal terms to an income, salary, bonus, interest on saving, dividends and profit.There is no moral reason for it not to be taxed.
This is where our opinions differ. You've stated yours I've stated mine. Repeating your stance doesn't raise it above mine.It is both just and fair.
I don't believe it is in execution or as a functioning principle within society.Or more specifically it's neither unjust nor unfair.
I don't think it is 'right' either.
I locked into it because YOU wrote "it is an unearned income and therefore it should be taxed". It is neither an income nor can you determine whether it is earned or unearned.You seem to be locked into the subjective definition of earned. I'm not really sure why. Ownership of assets has passed from one person to another. It's taxed. There's no moral issue here.
We've been over the morality it is that which I think would determine whether it is taxed.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
And there are those that claim that inheritance tax isn't immoral. :roll:Torvid wrote:suzyb wrote:Am I right in thinking that even if you still live in that home you could be forced to sell it if you don't have the spare cash to pay the IHT.
I think if your still living in the home it would be wise to move the house to your name, I think this needs to be done a few year before the death of the parent but it was advised to my parents to do it sooner rather than latter when they where making out wills.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
DonDaddyD wrote:
And there are those that claim that inheritance tax isn't immoral. :roll:Torvid wrote:suzyb wrote:Am I right in thinking that even if you still live in that home you could be forced to sell it if you don't have the spare cash to pay the IHT.
I think if your still living in the home it would be wise to move the house to your name, I think this needs to be done a few year before the death of the parent but it was advised to my parents to do it sooner rather than latter when they where making out wills.
You pay tax when your earn it, tax when you save it (if you arnt carefull) don't see why you have to pay tax on it when you die.Commuter: Forme Vision Red/Black FCN 4
Weekender: White/Black - Cube Agree GTC pro FCN 30 -
Freind of my folks was in the IHT conundrum:
He is a schoolteacher in Worcestershire; inherits £3M georgian end of Terrace family home next to Westbourne Park Tube Station in Chelsea. Home has been in family since late 1800's.
Has to remortgage his own home to pay IHT and leave chelsea to his 2 kids - doesn't get to retire when he planned to. Has no savings at all.
Is renting out the property to a Banker at the moment to make ends meet.0 -
DonDaddyD wrote:TailWindHome wrote:
An inheritance is a form of income or gain in the same way as your salary, your bonus, interest on your savings, dividend income, profit from trading or pension.
An inheritance is a gift. (Traditionally given by one person upon their death to another person). This I believe to be different in legal terms to an income, salary, bonus, interest on saving, dividends and profit..
You didn't read that HMRC link then? Gifts can still be taxed - if your dad gave you a six figure sum, you would have to pay capital gains tax on it.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
DonDaddyD wrote:This is where our opinions differ. You've stated yours I've stated mine.
That's as good a summary as you'll ever see.“New York has the haircuts, London has the trousers, but Belfast has the reason!0 -
It's a bit hard to have sympathy for someone who has received a massive inheritance and then chooses penury. Tradition is all well and good, but it sounds like the house owns him, rather than the other way around... Spend the money, enjoy it!gtvlusso wrote:Freind of my folks was in the IHT conundrum:
He is a schoolteacher in Worcestershire; inherits £3M georgian end of Terrace family home next to Westbourne Park Tube Station in Chelsea. Home has been in family since late 1800's.
Has to remortgage his own home to pay IHT and leave chelsea to his 2 kids - doesn't get to retire when he planned to. Has no savings at all.
Is renting out the property to a Banker at the moment to make ends meet.0 -
“New York has the haircuts, London has the trousers, but Belfast has the reason!0
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Yes but at the point of death/gaining inheritance you aren't then bombarded with Capital Gains Tax while grief stricken with the recent loss.rjsterry wrote:DonDaddyD wrote:TailWindHome wrote:DonDaddyD wrote:You do not think that is morally objectionable? Wow.
I don't see what morality has to do with this at all.
The 'death' isn't being taxed the inheritance is. For the beneficiary it is 'unearned income', there's no reason of morality for it not to be in the scope of taxation.
Morality has everything to do with it. Morality ensures that the action or decision is 'just and fair'. 'Just and fair' is a core principle of any legal decision or legislation. It is not just or fair to tax those on low incomes more than those on high incomes, hence we have a progressive tax system.
Therefore morality should an influencing factor.
'Unearned Income'
If my Father wants to pay me a salary for being his son, chooses to hand me his car, house or his estate when living is that not also an 'unearned income'? It is an inheritance of a kind but is not taxed. The key component of inheritance tax is death, therefore I feel it correct to call it a 'death tax'.
Well above a threshold, you have to declare it, so yes it is taxed - unless he gives it to you in a big brown envelope stuffed with fifties, it will show up in your bank account.
http://www.hmrc.gov.uk/cgt/intro/gifts-inherit-divorce.htm
Inheritance Tax allows the Government to profit from death.Food Chain number = 4
A true scalp is not only overtaking someone but leaving them stopped at a set of lights. As you, who have clearly beaten the lights, pummels nothing but the open air ahead. ~ 'DondaddyD'. Player of the Unspoken Game0 -
gtvlusso wrote:Freind of my folks was in the IHT conundrum:
He is a schoolteacher in Worcestershire; inherits £3M georgian end of Terrace family home next to Westbourne Park Tube Station in Chelsea. Home has been in family since late 1800's.
Has to remortgage his own home to pay IHT and leave chelsea to his 2 kids - doesn't get to retire when he planned to. Has no savings at all.
Is renting out the property to a Banker at the moment to make ends meet.
Why not sell the house?0 -
Rick Chasey wrote:gtvlusso wrote:Freind of my folks was in the IHT conundrum:
He is a schoolteacher in Worcestershire; inherits £3M georgian end of Terrace family home next to Westbourne Park Tube Station in Chelsea. Home has been in family since late 1800's.
Has to remortgage his own home to pay IHT and leave chelsea to his 2 kids - doesn't get to retire when he planned to. Has no savings at all.
Is renting out the property to a Banker at the moment to make ends meet.
Why not sell the house?
I'm guessing because it has been in the family since late 1800s.0
