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Source: (consider it)
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Thread: Inheritance Tax
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Plique-à-jour
Shipmate
# 17717
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Posted
It's true, but people want to keep hope. They like to think that one day they might have a chance to get out. No chance. Making it retroactive to seven years before the person's death... it's just social engineering. How is it not?
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Plique-à-jour:
Making it retroactive to seven years before the person's death... it's just social engineering. How is it not?
I suspect that section of the law is included as a measure against tax avoidance via deathbed transfers of wealth. Seven years may be excessive, but there is a logic to the provision beyond social engineering.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Plique-à-jour
Shipmate
# 17717
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Posted
Tax avoidance by not being dead, in other words. They don't want people to avoid the tax just because it isn't applicable to them. It's ghoulish.
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Leorning Cniht
Shipmate
# 17564
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Posted
quote:
Originally posted by Arethosemyfeet:
If someone has an alternative method of raising the cash that doesn't involve shifting the burden from the rich to the poor, I'm all ears. I suspect, though, that any attempt to do so will meet with waffle about laffer curves and "wealth creators" and other self-serving bullshit from the Daily Hate and their puppets in government.
Wikipedia has a useful pie chart of UK tax revenue here, and one of UK government spending here. No, they're not from the same year, but things only shift around a little from one year to the next.
We see that IHT raises about 3 billion quid a year - about half a percent of the annual tax take. That's not a vast amount - it's about the same as the tax take from the sale of wine - but it's also not zero.
As I said earlier, I'd scrap it, scrap council tax, probably business rates, and probably stamp duty, and replace the whole thing with a Land Value Tax. I might shift some of the income tax burden on to LVT too - maybe by abolishing NI contributions.
Posts: 5026 | From: USA | Registered: Feb 2013
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Plique-à-jour:
Tax avoidance by not being dead, in other words. They don't want people to avoid the tax just because it isn't applicable to them. It's ghoulish.
No. The seven year clause is there to prevent, for example, someone claiming that because the estate was signed over to them five minutes prior to death it's not taxable as an inheritance, but as a salary or a gift or some other transfer of funds that's subject to a more favorable tax rate.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Plique-à-jour
Shipmate
# 17717
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Posted
But their claim would not be inaccurate, would it? Seven years brings under the marquee people who weren't even ill when they made their gift.
Those people who are so rich that they can offload houses and monies without impeding their standard of living are in the clear, but people who are merely prosperous get the shaft. It sure looks like an attempt to impede social mobility to me.
[ 27. August 2013, 18:19: Message edited by: Plique-à-jour ]
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Plique-à-jour:
But their claim would not be inaccurate, would it? Seven years brings under the marquee people who weren't even ill when they made their gift.
That's more or less the point; to insure that the transfer was an actual gift (or whatever), not a hastily arranged tax shelter. You can make the argument that seven years is the wrong place to draw the line, but such a line would have to be drawn somewhere.
quote:
Originally posted by Plique-à-jour:
Those people who are so rich that they can offload houses and monies without impeding their standard of living are in the clear, but people who are merely prosperous get the shaft. It sure looks like an attempt to impede social mobility to me.
In the case of the seven year clause, it's more a case that without it people who die in bed after a moderately lengthy illness are in the clear, but people who die suddenly and unexpectedly get the shaft.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Plique-à-jour
Shipmate
# 17717
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Posted
quote:
Originally posted by Crœsos:
quote:
Originally posted by Plique-à-jour:
But their claim would not be inaccurate, would it? Seven years brings under the marquee people who weren't even ill when they made their gift.
That's more or less the point; to insure that the transfer was an actual gift (or whatever), not a hastily arranged tax shelter. You can make the argument that seven years is the wrong place to draw the line, but such a line would have to be drawn somewhere.
But... there's no difference. If the person isn't dead, it isn't for the state to decide that their gift had the wrong motives and is therefore to be treated like a scam. A person arranging things on their deathbed is no less motivated by concern for their loved ones than a person handing everything over while they're in the pink; the difference is that only the seriously rich can afford to do the latter. What retired person can live for seven years minus the better part of their capital and property? Only someone with tons of it.
quote:
Originally posted by Crœsos:
In the case of the seven year clause, it's more a case that without it people who die in bed after a moderately lengthy illness are in the clear, but people who die suddenly and unexpectedly get the shaft.
Without the clause, the people to whom it's applicable would pay the tax, and the people to whom it isn't applicable wouldn't. In 99.9% of cases I am not an anti-tax moaner, and I've spoken against anti-tax moaning, this just seems to me like a targeted and coersive measure.
[ 27. August 2013, 18:41: Message edited by: Plique-à-jour ]
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Plique-à-jour:
But... there's no difference. If the person isn't dead, it isn't for the state to decide that their gift had the wrong motives and is therefore to be treated like a scam. A person arranging things on their deathbed is no less motivated by concern for their loved ones than a person handing everything over while they're in the pink; the difference is that only the seriously rich can afford to do the latter. What retired person can live for seven years minus the better part of their capital and property? Only someone with tons of it.
Also known as "the only people who pay the inheritance tax". If you're just scraping by your estate isn't large enough to be subject to the tax.
quote:
Originally posted by Plique-à-jour:
quote:
Originally posted by Crœsos:
In the case of the seven year clause, it's more a case that without it people who die in bed after a moderately lengthy illness are in the clear, but people who die suddenly and unexpectedly get the shaft.
Without the clause, the people to whom it's applicable would pay the tax, and the people to whom it isn't applicable wouldn't. In 99.9% of cases I am not an anti-tax moaner, and I've spoken against anti-tax moaning, this just seems to me like a targeted and coersive measure.
All taxes are targeted and coercive. Taxing income targets those who work for a living. Taxing capital gains targets those whose money works for their living. And if you don't pay your taxes the government has a large number of coercive means at its disposal. Singling out a tax on money changing hands via inheritance as being more targeted or coercive than a tax on money changing hands via salary or dividend or sales or whatever seems to be special pleading.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Plique-à-jour
Shipmate
# 17717
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Posted
Targeting a kind of transaction isn't like targeting a gift. Targeting a gift is like targeting an emotion. And again, I don't see how it doesn't favour the rich in practice.
It probably is special pleading, because I do think the circumstances are different. The equivalent would be the proposed 'pasty tax'.
[ 27. August 2013, 19:14: Message edited by: Plique-à-jour ]
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Albertus
Shipmate
# 13356
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Posted
quote:
Originally posted by Plique-à-jour:
But their claim would not be inaccurate, would it? Seven years brings under the marquee people who weren't even ill when they made their gift.
Those people who are so rich that they can offload houses and monies without impeding their standard of living are in the clear, but people who are merely prosperous get the shaft...
Hang in a minute: we've been here before, haven't we? Even if strictly speaking the testator pays the tax, it's only on what is left after they are dead. So whether you're merely prosperous or unbelievably rich, IHT won't affect your standard of living, will it? Spend what you want, or need, to, and if your heirs only get 60% of what's left above £350K or whatever it is (and BTW most people I know would think that even say a third share in £350K was a pretty good windfall, which is what a legacy is) that's their look-out.
[ 27. August 2013, 19:20: Message edited by: Albertus ]
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Plique-à-jour:
Targeting a kind of transaction isn't like targeting a gift. Targeting a gift is like targeting an emotion.
Except that from a financial perspective a "gift" in indistinguishable from any other transaction. To take a real world example, creationist Kent Hovind made the argument that his organization had no employees receiving salaries, just "volunteers" who were occasionally given "gifts" of cash. As such Hovind was not responsible for income tax withholding or paying the employer's portion of the social security tax. This argument worked about as well as you'd think it would.
quote:
Originally posted by Plique-à-jour:
And again, I don't see how it doesn't favour the rich in practice.
Because it's a tax that the non-rich will never pay. Unless you consider it a special favor to have a tax directed at you.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Plique-à-jour
Shipmate
# 17717
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Posted
Oh I remember the Hovind thing, and I've joked myself about the CofE's pulling this kind of stuff. I am not anti-tax, I just think this, particularly the seven year thing, is odious. The CofE's claims of not being an employer are cynical, I don't think the behaviour this is aimed at is.
The poor will never pay it, but I wouldn't not everyone in a position to be hit by it is going to be rich per se. And the really rich, it won't hurt at all, just the upwardly mobile. I have no expectation whatsoever of being left a big house or a wad of money suddenly, but I don't resent other people's good fortune either. It's just sad to think of someone's last efforts for their loved ones being wasted.
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Albertus
Shipmate
# 13356
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Posted
But hang on. Let's get this in proportion. This is NOT about the big bad state coming along and snaffling everything. As we've said, first of all anything under £325000 isn't taxed (just looked it up). Then anything over that gets taxed at 40%. So if you leave £500,000, your heirs get, after tax, £430,000 (your bequest is reduced by 14%); if you leave £1 million, your heirs get £730,000 (your bequest is reduced by 27%); if you leave £2,000,000, your heirs get £1,330,000 (your bequest is reduced by 33.5%)- and so on. So IHT may be a bit clunky and inferior to proper wealth or land value taxes, but it's relatively progressive and for most of the minority of people who have to pay it, comparatively unburdensome.
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My beard is a testament to my masculinity and virility, and demonstrates that I am a real man. Trouble is, bits of quiche sometimes get caught in it.
Posts: 6498 | From: Y Sowth | Registered: Jan 2008
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Albertus:
But hang on. Let's get this in proportion. This is NOT about the big bad state coming along and snaffling everything. As we've said, first of all anything under £325000 isn't taxed (just looked it up). Then anything over that gets taxed at 40%. So if you leave £500,000, your heirs get, after tax, £430,000 (your bequest is reduced by 14%); if you leave £1 million, your heirs get £730,000 (your bequest is reduced by 27%); if you leave £2,000,000, your heirs get £1,330,000 (your bequest is reduced by 33.5%)- and so on.
Well, the exemption is only £325,000 for the estate of an unmarried person. The estate of a couple that's married (or civilly unionized) has an exemption of £650,000. (That's about US$1,000,000 for American shipmates.) It should also be noted that you're allowed to pay the tax on the portion of the estate that can't be easily divided to pay taxes (e.g. a house) in installments over ten years.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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tclune
Shipmate
# 7959
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Posted
quote:
Originally posted by Plique-à-jour:
It's just sad to think of someone's last efforts for their loved ones being wasted.
I don't personally know anyone who has been socking away money and property into an estate for their children. I know a lot of people who transfer their house into their children's name so they can dodge paying for their own medical care if they need long-term care (and the folks I know who do this vociferously oppose making such care an entitlement for folks who can't hire lawyers to game the system for them.)
In truth, the people I know who work to avoid paying taxes like this do it because they hate to pay taxes, not because they love their kids. And I'm far from convinced that leaving a huge wad of money to your heirs is in the interest of the heirs. I am much more familiar with heirs falling out over some fool piece of jewelry than I am of their feeling the love from beyond the grave. As always, YMMV.
--Tom Clune
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by tclune:
And I'm far from convinced that leaving a huge wad of money to your heirs is in the interest of the heirs. I am much more familiar with heirs falling out over some fool piece of jewelry than I am of their feeling the love from beyond the grave. As always, YMMV.
America's founding fathers were very much in favor of inheritance taxes generally. They saw them as an impediment to the development of an hereditary aristocracy based on inherited money and privilege rather than individual merit and achievement. Of course it could be argued that the British system is mostly about inherited money and privilege.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Gee D
Shipmate
# 13815
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Posted
Lets assume your L325K is roughly equivalent to $Aus650K. Here, that will get you a house, but one which would be under average in Sydney and Melbourne. So your tax kicks in on a very modest estate, not the estate of a rich person at all. I can't now remember the details of death duties here*, but they started rather higher than that, with a higher commencement if the estate was passing to a surviving spouse.
* I started in practice in the late 60s as an articled clerk, and used attend with documents at the Stamp Duties Office for duty to be paid, but don't now have the time to chase up the rates for the long-abolished tax.
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Not every Anglican in Sydney is Sydney Anglican
Posts: 7028 | From: Warrawee NSW Australia | Registered: Jun 2008
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Gee D:
Lets assume your L325K is roughly equivalent to $Aus650K. Here, that will get you a house, but one which would be under average in Sydney and Melbourne. So your tax kicks in on a very modest estate, not the estate of a rich person at all.
That's the exemption for the estate of an unmarried person. In the UK an estate formerly owned by a married or civilly unionized couple has double the exemption, or £650,000 (or a little over 1.1 million Australian dollars at the current exchange rate). Now a million (or half a million) Australian dollars can be called a lot of things, but I'm not sure "modest" covers it.
quote:
Originally posted by Gee D:
I can't now remember the details of death duties here*, but they started rather higher than that, with a higher commencement if the estate was passing to a surviving spouse.
Interesting. Most jurisdictions, including the UK, don't consider inheritance by a spouse to be taxable at all. I think the principle is that property is owned jointly within a marriage, so it isn't really changing hands upon the death of one of the parties.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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orfeo
Ship's Musical Counterpoint
# 13878
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Posted
quote:
Originally posted by Crœsos:
Now a million (or half a million) Australian dollars can be called a lot of things, but I'm not sure "modest" covers it.
Trust me when I say that GeeD knows the Sydney real estate market a hell of a lot better than you do!
As for half a million... remember I said I lived in a cheap house? I do. I live in a suburb that is supposed to be one of the more disadvantaged suburbs in Canberra. Admittedly Canberra as a whole is probably relatively wealthy, but the point is that I live in a cheap place (and Canberra as a whole is not as expensive as many parts of Sydney).
I don't know exactly how much my house is worth now, but I strongly suspect it is over 400 thousand. The house next door is literally a mirror image of mine and it sold for 410 thousand a couple of years ago.
That's what very modest houses sell for around here.
[ 28. August 2013, 02:25: Message edited by: orfeo ]
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Technology has brought us all closer together. Turns out a lot of the people you meet as a result are complete idiots.
Posts: 18173 | From: Under | Registered: Jul 2008
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Gee D
Shipmate
# 13815
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Posted
Croesos a very quick search shoes that the Sydney median house price is around $650K. The same site noted that " Sydney is still the most expensive city in Australia, with both the highest median house and apartment price, and also boasts 66% of suburbs with a median price in excess of $1 million". This suggests that the majority of homes below the $650K mark are not that far below it. I can't in my quick lunch adjournment find that sort of detail. These are not the homes of wealthy people.
My recollection from standing in the queue at the Stamp duties Office in the late 60s is of paying duty on property passing to a surviving spouse. Abolition occurred first in Western Australia in the early 70s from memory and the other states quickly followed.
[ 28. August 2013, 03:28: Message edited by: Gee D ]
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Not every Anglican in Sydney is Sydney Anglican
Posts: 7028 | From: Warrawee NSW Australia | Registered: Jun 2008
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by orfeo:
quote:
Originally posted by Crœsos:
Now a million (or half a million) Australian dollars can be called a lot of things, but I'm not sure "modest" covers it.
Trust me when I say that GeeD knows the Sydney real estate market a hell of a lot better than you do!
As for half a million... remember I said I lived in a cheap house? I do. I live in a suburb that is supposed to be one of the more disadvantaged suburbs in Canberra. Admittedly Canberra as a whole is probably relatively wealthy, but the point is that I live in a cheap place (and Canberra as a whole is not as expensive as many parts of Sydney).
I don't know exactly how much my house is worth now, but I strongly suspect it is over 400 thousand. The house next door is literally a mirror image of mine and it sold for 410 thousand a couple of years ago.
That's what very modest houses sell for around here.
Admittedly I know nothing about the Sydney real estate market other than what can be produced via a Google search, but according to this article at the top of the Google queue the median house price in Sydney is AU$640,000 (~£370,000). Since that's a median value half the houses in Sydney are worth less than this. If the (UK) exemption for an unmarried (UK) individual is applied an estate consisting of nothing except a median-value house in Sydney and only enough cash to pay off any outstanding debts, the effective (UK) tax rate would be less than 5%. A similar estate for a married (UK) couple would be tax free. This does not seem overly burdensome.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Gee D
Shipmate
# 13815
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Posted
I took my figure from a rather hard to read graph. The other figure is more relevant as it shows that the bottom of the range would be quite close to the median. $1m would not buy a luxury house at all, not a house of a wealthy person. More likely, it would be the house of a couple in their late 30s/early 40s, with 2 or 3 young children; both parents working.
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Not every Anglican in Sydney is Sydney Anglican
Posts: 7028 | From: Warrawee NSW Australia | Registered: Jun 2008
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la vie en rouge
Parisienne
# 10688
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Posted
In most parts of the UK (not London) £650 000 will buy a very, very nice house (round my parents' way, you can get a detached four bedroom home for £300 000).
What you're also forgetting is that those on truly modest incomes often never get to buy a home at all - they have to rent.
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Rent my holiday home in the South of France
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Gee D
Shipmate
# 13815
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Posted
The rental market, both public and private, is much smaller here than in the UK, and has been for a long time.
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Not every Anglican in Sydney is Sydney Anglican
Posts: 7028 | From: Warrawee NSW Australia | Registered: Jun 2008
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Crœsos:
That's the exemption for the estate of an unmarried person. In the UK an estate formerly owned by a married or civilly unionized couple has double the exemption, or £650,000
This raises another potential issue - with the dramatic rise in single-parent households, will IHT end up discriminating against them by alowing married couples to leave more to their children than single parents?
The house is worth exactly the same either way, but because your dad (or mom) was a deadbeat who buggered off when you were a child - or even because your parents divorced at some point - you don't get to keep as much of it once your remaining parent dies. Fair?
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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aumbry
Shipmate
# 436
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Posted
quote:
Originally posted by Mere Nick:
While it appears UK tax law limits the amount that can be gifted tax free, maybe it would help out if you started gifting a small part of the ownership of the house each year to each of your heirs. It could also help reduce the value for inheritance tax purposes since having many owners could reduce the value of your portion, especially if the time comes to where you own a minority interest.
When I look online at what the queen owns, it just says the royal family. Maybe they are doing that very thing I have described.
You should go see a pro about that.
If a person gifts an asset which they continue to enjoy then it is classed a "gift with reservation" and does not work for inheritance tax. Giving away portions of your house whilst continuing to live there would fall into this category unless you were willing to pay a full market rent on their share to the new joint owners although they would suffer income tax on the rent paid to them.
Posts: 3869 | From: Quedlinburg | Registered: Jun 2001
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by tclune:
And I'm far from convinced that leaving a huge wad of money to your heirs is in the interest of the heirs.
I'm trying to work out a way in which inheriting a few million quid wouldn't be in my best interests (other than the obvious "one of my relatives would have died" part).
And don't give me any of that "dignity of work" crap. There's no dignity in spending the best years of my life shackled to a desk rather than being out there doing the things I want to do. The amount of times I look out that window and wish I had a rich uncle who could leave me enough money to spend the rest of my life on the other side of the glass......
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Jane R
Shipmate
# 331
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Posted
[in reply to Marvin, who complained about The Injustice To Single-Parent Families...]
But each child has two parents and the allowance for couples is exactly twice what it is for a single person. So whether or not your parents are still together, their estates will be eligible for a total of £650,000 exemption from the inheritance tax.
Of course if they DO get divorced they are likely to end up with less money overall; divorce is an expensive business. I doubt they'd be willing to stay together For The Sake Of The Children's Inheritance, though... my Other Half's parents used to send us postcards from their exotic holidays telling us how much fun they were having spending his inheritance (and why shouldn't they spend it - they worked for it!)
I think the real problem in the UK is the stupidly inflated house prices. Inheritance tax was only originally meant to affect the super-rich, but nowadays quite a lot of people own houses that are worth £300,000+ (even outside London and the South-East) and are therefore liable for IHT, despite not thinking of themselves as rich. There aren't so many people with £300K in savings.
[ 28. August 2013, 09:31: Message edited by: Jane R ]
Posts: 3958 | From: Jorvik | Registered: May 2001
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Jane R:
But each child has two parents and the allowance for couples is exactly twice what it is for a single person. So whether or not your parents are still together, their estates will be eligible for a total of £650,000 exemption from the inheritance tax.
Not every child has two married parents. Very many do not, indeed very many have never had two parents other than at the moment of conception.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Jane R
Shipmate
# 331
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Posted
Way to miss the point, Marvin.
A single person gets an exemption of £325K.
A couple gets an exemption of £650K (2x£325K).
If you are the only heir then you scoop the pool whether or not your parents were actually married to each other at the time of their deaths. If you're not then you can treat us all to an edifying display of sibling rivalry as you duke it out with your brothers and sisters to decide who gets what. Either way, the first £325K of each estate is not liable for inheritance tax.
If one parent has a much smaller estate that is not liable for IHT at all, then yes, some of that (total) £650K exemption is effectively wasted. But getting divorced was in their best interests, not yours. I am surprised (but nevertheless gratified) to discover that you think there are circumstances where you believe someone else's interests should trump your own... presumably this means you would never consider divorce, in order to protect your children's inheritance?
I don't think there's much you can do about the deadbeat dad/mum who absconds as soon as possible after conception/birth; the CSA couldn't even get child support payments out of them. I suppose if they're dead they can't run away while you try to extract money from the estate.
I daresay a lawyer will be along in a minute to clarify this, but surely the cases where the £650K couples exemption comes into play are fairly rare? Presumably their estates would only qualify for the joint exemption if they died at the same time...
[ 28. August 2013, 09:57: Message edited by: Jane R ]
Posts: 3958 | From: Jorvik | Registered: May 2001
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Jane R:
Way to miss the point, Marvin.
Actually, I think it is you who has misunderstood. I'm referring to single-parent households with assets equivalent to those with two parents. The actual value of the estate is exactly the same, but because it happens to have come from only one parent the beneficiary/ies will get slammed for more tax.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Jane R:
I daresay a lawyer will be along in a minute to clarify this, but surely the cases where the £650K couples exemption comes into play are fairly rare? Presumably their estates would only qualify for the joint exemption if they died at the same time...
Firly common, I'd have thought. Married people can leave all their assets to their spouse with no IHT whatsoever, and their allowance is then carried over to when the second spouse dies. So the beneficiaries of any married couple with assets over £650,000 will get the full £650,000 tax-free allowance regardless of how long there is in between the deaths of the couple in question.
None of which applies to unmarried couples. The beneficiaries of an unmarried couple with exactly the same assets as above will end up with a significantly smaller net inheritance when the second partner dies.
In the modern world where marriage is no longer the norm, is that fair?
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Albertus
Shipmate
# 13356
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Posted
Of course it is. You should have a choice: if you want your relationship to be legally recognised, you get married/ civil partnered: if you don't, you don't.
Posts: 6498 | From: Y Sowth | Registered: Jan 2008
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orfeo
Ship's Musical Counterpoint
# 13878
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Posted
quote:
Originally posted by Albertus:
Of course it is. You should have a choice: if you want your relationship to be legally recognised, you get married/ civil partnered: if you don't, you don't.
And you expect a lot of folks in their 20s, or younger, who have children outside of marriage to be thinking about the implications for inheritance tax in 50+ years time when making that decision??
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Technology has brought us all closer together. Turns out a lot of the people you meet as a result are complete idiots.
Posts: 18173 | From: Under | Registered: Jul 2008
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Marvin the Martian
Interplanetary
# 4360
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Posted
I was thinking of fairness to the beneficiaries, not to the couple themselves.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Jane R
Shipmate
# 331
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Posted
Marvin: quote:
Actually, I think it is you who has misunderstood. I'm referring to single-parent households with assets equivalent to those with two parents. The actual value of the estate is exactly the same, but because it happens to have come from only one parent the beneficiary/ies will get slammed for more tax.
Oh, I see where you're coming from now (and thanks for clarifying when IHT is applied) but I still don't understand why you think it is unfair that [the heirs of] a single person with an estate twice the size of a couple should have to pay more IHT. None of my family was ever rich enough to qualify for it until the housing boom and thanks to the eldercare crisis, probably none of us ever will be (just as well we have those vastly overpriced houses to sell to fund our care homes, though).
You obviously move in different circles anyway - I don't know any single people who have accumulated that much, at least not well enough to play a starring role in their wills.
Posts: 3958 | From: Jorvik | Registered: May 2001
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Jane R
Shipmate
# 331
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Posted
Marvin: quote:
I was thinking of fairness to the beneficiaries, not to the couple themselves.
... but it is quite amusing to see you arguing for altruism for a change ![[Two face]](graemlins/scot_twoface.gif)
Posts: 3958 | From: Jorvik | Registered: May 2001
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Jane R:
... but it is quite amusing to see you arguing for altruism for a change
I've always argued in favour of policies that let people keep their money in their own pockets, rather than having the government take it away.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Jane R:
... but it is quite amusing to see you arguing for altruism for a change
I've always argued in favour of policies that let people keep their money in their own pockets, rather than having the government take it away.
Which is why I'm fairly certain that if there were no doubling of the exemption for married (and civilly unionized) couples you'd be complaining about the 'marriage penalty' that allows a couple to double the tax exemption on their estate by getting divorced. The specifics of your objections don't matter so much as whether or not they can be used to argue against any form of taxation.
Of course, in the most technical sense it's not the inheritance tax that's preventing people from "keep[ing] their money in their own pockets", it's the fact that they're dead.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Gee D:
My recollection from standing in the queue at the Stamp duties Office in the late 60s is of paying duty on property passing to a surviving spouse.
All I can say is that inheritance by a spouse is tax-exempt in most countries with an inheritance tax that I'm familiar with. This was, in fact, the key point in United States v. Windsor [PDF], the recent U.S. Supreme Court cast that ruled Section 3 of the Defense of Marriage Act (DOMA) unconstitutional. Edith Windsor was legally married by the state of New York to Thea Speyer but was still required to pay inheritance tax by the federal government since DOMA prevented the federal government from recognizing the marriage as valid. If Thea had been Theo the entire estate would have been transferred tax free. In other words, it was a case where someone could demonstrate a quantifiable harm being done by DOMA's unequal treatment of same-sex and opposite-sex marriages.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Crœsos:
Of course, in the most technical sense it's not the inheritance tax that's preventing people from "keep[ing] their money in their own pockets", it's the fact that they're dead.
Heh, true that. Especially if you forget that I'm contrasting "people" (as in "THE people") with "government" when I say that. I could have made it clearer by saying "policies that let thepeople keep their money in their own pockets, rather than having the government take it away".
Inheritance is money moving from people to people, which means the people are still keeping it themselves.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Albertus
Shipmate
# 13356
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Posted
quote:
Originally posted by orfeo:
quote:
Originally posted by Albertus:
Of course it is. You should have a choice: if you want your relationship to be legally recognised, you get married/ civil partnered: if you don't, you don't.
And you expect a lot of folks in their 20s, or younger, who have children outside of marriage to be thinking about the implications for inheritance tax in 50+ years time when making that decision??
I woould hope that anybody who is having children would think about the possible legal consequences that might arise in a whole range of circumstances, including their death.
Posts: 6498 | From: Y Sowth | Registered: Jan 2008
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aumbry
Shipmate
# 436
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by tclune:
And I'm far from convinced that leaving a huge wad of money to your heirs is in the interest of the heirs.
I'm trying to work out a way in which inheriting a few million quid wouldn't be in my best interests (other than the obvious "one of my relatives would have died" part).
And don't give me any of that "dignity of work" crap. There's no dignity in spending the best years of my life shackled to a desk rather than being out there doing the things I want to do. The amount of times I look out that window and wish I had a rich uncle who could leave me enough money to spend the rest of my life on the other side of the glass......
Whether it would be bad for you or not it would almost certainly be bad for society if in a mature economy wealth passed untaxed from one generation to another. Instead of protecting private property it would merely see it gradually concentrated in the hands of small class of super-rich rentiers. The situation would probably be like modern day Saudi Arabia or France prior to the Revolution.
Posts: 3869 | From: Quedlinburg | Registered: Jun 2001
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Crœsos:
Of course, in the most technical sense it's not the inheritance tax that's preventing people from "keep[ing] their money in their own pockets", it's the fact that they're dead.
Heh, true that. Especially if you forget that I'm contrasting "people" (as in "THE people") with "government" when I say that. I could have made it clearer by saying "policies that let the people keep their money in their own pockets, rather than having the government take it away".
Inheritance is money moving from people to people, which means the people are still keeping it themselves.
If you're arguing at that level of abstraction then the government isn't taking away any money from the people since all money collected (and sometimes more) is quickly spent and ends up back in the hands of "the people". That might be a reasonable claim if governments were routinely amassing stockpiles of cash, but most Western governments actually run deficits.
And, of course, this ignores the claims by democratic governments that the the government is the people.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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Marvin the Martian
Interplanetary
# 4360
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Posted
quote:
Originally posted by Crœsos:
If you're arguing at that level of abstraction then the government isn't taking away any money from the people since all money collected (and sometimes more) is quickly spent and ends up back in the hands of "the people".
By the same logic burglary would be perfectly OK, but you wouldn't expect me to make that claim, would you?
There's a bit more to it. Individual people - all individual people - should be as free as possible to spend (or save) their money as they see fit and according to their own priorities. It shouldn't be decided for them by government.
quote:
And, of course, this ignores the claims by democratic governments that the the government is the people.
I'd laugh, only that claim isn't even funny any more. The government is the people? Which people? Every single government we've had since I was born has seen at least one - often more - major public protest against its policies. If the government is the people, then how can that happen?
Democratic government is a sham - a self-perpetuating political elite that occasionally gets us to put marks on pieces of paper as if that shit actually makes a difference to our lives. All we people ever get to do is change the colour of the ties on the interchangeable dickheads who shit all over us. Recessions and upturns happen regardless of the tie colour. They all have the same policies. They all have the same lucrative jobs waiting for them in the City (or the House of Lords) once they've spent long enough raiding the expenses pot (our tax money at work!). None of them give a shit about you, me, or anyone else in this whole damn country.
The government is the people. What a crock of shit.
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Hail Gallaxhar
Posts: 30100 | From: Adrift on a sea of surreality | Registered: Apr 2003
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Albertus
Shipmate
# 13356
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Posted
Marvin
quote:
Individual people - all individual people - should be as free as possible to spend (or save) their money as they see fit and according to their own priorities. It shouldn't be decided for them by government.
Which might mean, in fact, that you don't think that there should be a government, because any government, even of the most minimally nighwatchman kind, needs to take some money from individuals and to spend it on their behalf but not in ways that each of them would necessarily choose.
Is that your position? Or do the words 'as possible' mean that you're not actually an anarchist? If so, you then get into questions about what that 'as possible' means (negative and positive conceptions of liberty and so on) and about who decides the bounds of possibility.
As for your rant against government and politicians, what is your evidence for the claims that you make?
Posts: 6498 | From: Y Sowth | Registered: Jan 2008
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Crœsos
Shipmate
# 238
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Posted
quote:
Originally posted by Marvin the Martian:
quote:
Originally posted by Crœsos:
If you're arguing at that level of abstraction then the government isn't taking away any money from the people since all money collected (and sometimes more) is quickly spent and ends up back in the hands of "the people".
By the same logic burglary would be perfectly OK, but you wouldn't expect me to make that claim, would you?
Why wouldn't I expect you to make that claim? It is consistent with your argument that just moving assets around within "the people" is better than taxation. Especially since burgled goods will probably enter the tax-free black market economy whereas unburgled goods will likely be taxed at some point.
quote:
Originally posted by Marvin the Martian:
There's a bit more to it. Individual people - all individual people - should be as free as possible to spend (or save) their money as they see fit and according to their own priorities. It shouldn't be decided for them by government.
Which brings us back to the fact that the dead don't have "priorities" and usually aren't considered "people" in the legal sense of the term.
And can you make up your mind about whether you're discussing "individual people" or "the people" generically? You seem to switch back and forth between definitions for the sake of rhetorical convenience.
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Humani nil a me alienum puto
Posts: 10706 | From: Sardis, Lydia | Registered: May 2001
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agingjb
Shipmate
# 16555
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Posted
I've never seen why gifts and legacies are not simply taxed as income. Why eparate taxes applied to the donor rather than the recipient?
Then again politicians would far rather tax generosity than greed.
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Refraction Villanelles
Posts: 464 | From: Southern England | Registered: Jul 2011
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Jane R
Shipmate
# 331
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Posted
Marvin: quote:
I've always argued in favour of policies that let people keep their money in their own pockets...
...but it's not. The person who had the money is dead. The inheritance tax is paid by their estate before the heirs get their share.
If you want to be traditional you could work out the equivalent value in cows or sheep and turn up at the tax office with that... but I daresay HMRC would think of something equally wacky to do to you in return.
I'd rather my parents spent their excess cash on living comfortably and happily in their old age. That way they get to benefit from the money they earned.
If their joint estate is worth more than £650,000 when they both die (unlikely, given that they will probably have to pay for a nursing home at some point) then I am quite happy for the extra to be taxed in order to pay for care for other pensioners who have not been so lucky. It is not money I have earned myself; it won't be enough to enable me to retire to Barbados (I have to share with my sisters, and it won't be that much to start with); I'd be a fool to count on it and arrange my budget around it.
Have you considered buying a lottery ticket? Now there's a windfall that wouldn't be taxed. It's a fourteen million to one chance, but it might just work...
Posts: 3958 | From: Jorvik | Registered: May 2001
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