Inheritance tax is back in the news after Stephen Byers' demands that the next Labour leader should scrap the controversial tax. Gordon Brown says he won't scrap it, but neither will the Tories do away with the unpopular tax. Read the story here. So what's your take on inheritance tax? Is it a fair and necessary way of raising money for public services, or is it a penalty on hard work, thrift and enterprise?
Well i'm on record as decrying the current rip e'm off attitude inparticular of this goverment and it's stealth tax's however inheritance tax is one of the few tax's that you can avoid if you plan right in advance, you can progresivly give away your assets under a "deed of gift" providing you survive for 7 years after the deed is activated, with most normal folks their houses are their major asset and withnthe escalation in house prices a lot of folks will now fall into the inheritance tax bands currently 285K again it appears to be a ploy of this goverment not to recognise house price escalation and adjust the inheritance tax bands accordingly (all part of the rip e'm off system)
Yeah slapmatt, but it's a tax on money that has already been taxed (mostly). The idea of it was to take money off the 'filthy' rich; you know, those with accountants who could save them a fortune in 'legal' tax evasion whilst alive, but who would get their just desserts after death. Now many 'ordinary' people whose parents have payed tax at the full rate all their lives are being caught in the net. Don't scrap it- just raise the threshold to hit those for whom the LAW brought it into being to target.
I agree, raise the threshold, its now the working class who work hard that are being penalised or hit the most. The filthy rich can afford crafty accountants to dodge the tax.
My parents have worked all their lifes and never had anything off of the goverment until now, they paid the mortage off just about and now they are trying to enjoy it, why should the goverment cash in when its inherited, i think its robbery.
Originally posted by treaclepud: My parents have worked all their lifes and never had anything off of the goverment until now.
They would presumably have had married couple's allowance and child benefits and mortgage tax relief. And perhaps other stuff like tax releif on pension contributions too?
Personally I think a primary home should be exempt - so the tax is calculated on everything other than the main home - so (as intended) only the rich end up paying. That would ensure no-one was forced to sell the family home (which in some cases is actually their home - e.g. if they are grown up children living with a parent). That would also serve as a small disincentive for people to not own multiple homes and in the process price normal first time buyers out of the market - an insentive which wouldn't necessarily penalise someone for owning one small second home but might discourage greedy landlords from buying up dozens of properties.
Originally posted by EORSWINE: Yeah slapmatt, but it's a tax on money that has already been taxed (mostly).
This "taxed twice" argument doesn't really work. Try telling a shop that you won't pay the VAT on your purchases because you've already paid Income Tax and NI.
After all the hype, only 6.03 of the UK Electorate voted UKIP
Any tax which is avoidable is ineffective. Inheritance Tax is totally avoidable. At very least the first £300k of any estate is simply avoidable through use of IHT wills. Married couples who just elave everything to each other will pay at least £120k moe tax than they have to.
Other strategies can completely elliminate the inheritance tax liability in many cases. It is definately time to review this tax, either make it unavoidable or do away with it.
It seems to me that only the uninformed seem to end up paying Inheritance Tax. It hits hardesr when couples are not married or living in a civil partnership, we have worked with people to retrospectively changes Wills in these circumstances to alter the way the estate was left and thus avoid the family home having to be sold to pay the tax bill.
My best advice is get informed there are plenty of website like mine out on the internet that give you details of how inheritance tax works ours even has a calculator that lets you work out what tax bill you are likely to leave your family with. Don't let ignorance be the reason you end up paying inheirtance tax.
I agree with Baistow it is the working class that will get hit from inheritance tax!! This is because like TaxPlanner says they aren't educated in due time about it. In a way it's sad that once your are in the rich category and likely to inherit more fortunes the tax that may be implemented wont affect those types of people. However, the average Joe Blog who may inherit will more than likely feel the full negative force because they are unprepared. Also as an avergae Joe myself I never think of inheriting my parents homes as I work for myself and try to build on my which makes it that much harder when the times comes. The government should make more of an effort to make sure parents are aware of this when making wills and securing their heirs' future. It does any me that those who will leave their assests behind i.e. houses are those who have been paying taxes for considerable amounts of years and their children the same to think that suh a ridiculous percentage then goes back to the government again shows what a money pinching goverment we have. Who's priorities as usual are blatently skewed!
