It is currently Wed 26 Jun 2019 08:40 GMT
Change font size

    Latest Message from British Expat:

  • Five questions about Benin – Quick Quiz
    Try our Quick Quiz about Benin - known as Dahomey before 1975 and one of the most powerful kingdoms of pre-colonial West Africa.

Opinions/Politics

UK Inheritance Tax

Some people like to talk politics, others don't. I've made a separate forum so you can post if you want or ignore it if you don't. Hope this is an acceptable compromise.

UK Inheritance Tax

Postby cesampson » Mon 12 Feb 2007 15:41 GMT

Hi everyone,

If you are UK domiciled ( and that applies to the vast majority of UK citizens living abroad ) then when you shuffle of this mortal coil the chances are that HMRC ( that's the new name for UK's Inland Revenue department) will likely as not want a slice of your estate before it's righful owners - your children or others of your choice - get their cut.

Many ( dare I suggest the vast majority of you ) will regard that as grossly unfair, considering here that we are largely talking here about wealth that has been hard earned and highly taxed as you earned it.

Please, also, do not imagine that HMRC do not have their ways of catching up with your estate. Such devices as the EU interest tax directive, and very recent court judgements which allow HMRC to force UK domiciled banks to reveal to them full details of all accounts held in their offshore branches ( that's anywhere, not just in the EU, Channel Islands, Isle of Man, etc).

So, what can you actually do to prevent your grave from being robbed? Well maybe more than you think. The one thing that today's unfortunate crop of unprincipled career politicians fear more than anything else is that their feather bedded lifestyles will be brought to an abrupt end by the sudden loss of their seat at the next election. So if enough people make it clear to them now that abolition of IHT is a mandatory requirement if they want to get re-elected, then guess what..........IHT will, as sure as day follows night, be abolished!

Now, I do understand that some of you will not actually be voting in the next UK general election, for many and varied reasons. If you are able to vote, then I would urge you only to cast your vote for a party which has abolition of IHT as a pledge in its manefesto. However, there is also something you can do right now. Please visit the following link and add your name to the official pettion for the abolition of IHT :

http://petitions.pm.gov.uk/ihtcrusade/

May common sense and justice prevail.
Reminder: Premium Membership is required for access to private messages. Sign up now!
Posted by:
cesampson
Free member
 
Posts: 10
Joined: Wed 6 Dec 2006 17:15 GMT
Location: UK

UK Inheritance Tax

Postby cesampson » Sun 18 Feb 2007 12:38 GMT

Good Morning Folks,
My first posting on this topic refers

The website to go to is : http://petitions.pm.gov.uk/ihtcrusade/

As of this morning 71,657 UK citizens had signed this on-line petition. The deadline for signing the petition is the 30th of April.

Unless you still believe in Father Christmas, you will by now be well aware of the fact that the vast majority of our politicians today are totally unprincipled. By that I mean they are primarily driven by the desire to retain their highly paid and well pensioned positions at the next election......... above any other consideration. You also know full well that under current legislation, HMRC is entitled to rob a big slice of your hard earned estate from your children and grand children when you pass on. That equally applies in the case of your relatives back home in Blighty ( i.e. folk who may wish to leave their assets to you as opposed to Gordon Brown!) You no longer have to accept that as the inevitable.

This petition can empower you to correct the injustice of IHT. You can force the political class to abolish it. Please, go to the website today and cast your vote, and don't forget all UK citizens in your household are entitled to a vote.

Here's another good idea. Why not forward this email onto every other UK citizen in your email address list?

Together, we can make a difference!
Reminder: Premium Membership is required for access to private messages. Sign up now!
Posted by:
cesampson
Free member
 
Posts: 10
Joined: Wed 6 Dec 2006 17:15 GMT
Location: UK

Postby Dave » Sun 18 Feb 2007 15:39 GMT

I won't be signing the petition.

Speaking for myself, I see nothing at all unfair in the idea that people who've already been lucky enough to be born into a wealthy family should not be allowed to get an entirely free ride on the basis of having had a rich Daddy or Mummy. That's what IHT is supposed to be about; redistribution of the wealth to level the playing field somewhat. (I say "somewhat" advisedly. If Mummy/Daddy's rich, then their children will already have had a considerable leg-up from birth, long before they themselves have died and left their legacies.)

So I see nothing wrong in a properly designed inheritance tax, with the thresholds set to capture inheritances left by people of well above average means. I certainly wouldn't want to see IHT abolished out of hand.

In any event, I think the petition is seriously flawed. It doesn't provide a cogent case for the abolition of IHT; it's a rabble-rousing rant. I'll quote it in full, a sentence at a time:

Inheritance tax is an immoral form of taxation that penalises hard work and thrift.


You could just as easily argue from the other side: Wealth gained by inheritance is an immoral form of income [edited - I'd put earning, originally, but of course it's not earned at all] which encourages fecklessness and discourages hard work.

By raising a 40% levy on earned assets, it is also effectively double taxation.


Earned assets? By whom? Not the person who's receiving the assets, that's for sure. So remove IHT, and they're getting a tax-free gift. And, of course, the threshold for IHT is £285,000 (FY 06/07), so the chances are that anyone being caught by IHT is likely to have received a substantial bequest already.

It frequently piles financial misery and distress on families already suffering the pain of bereavement; that is nothing less than grave robbery.


I don't doubt that IHT causes many families many problems, but the same could be said of other forms of taxation. And I'm sure that the people who don't have to deal with IHT because the deceased wasn't rich enough (lucky them) have plenty of other problems to deal with instead. So this kind of emotive language does nothing for me. "Grave robbery"? Please!

A bit more reasoning and statement of fact would have persuaded me far better than this flannel; I get the feeling I'm being asked to suspend my judgment and surrender to my gut instincts.

Over the last decade, millions of households have been drawn into the death duty trap by steadily rising property prices.


How many families, exactly, and in what way? Even if they have, is that really an argument for abolishing IHT altogether rather than revising the allowances?
(And, of course, it hasn't been "death duty" for several years. Again, emotive words no doubt chosen on purpose by the petition drafters.)

Often, people are forced to sell their family homes to pay the duty.


Again: how often? This is such a woolly assertion - with no foundation in numbers at all - that it lacks any real impact. And what sort of family homes are we talking about? A two-up, two down in Neasden? A five-bed detached house in Morningside? Blenheim Palace?

The burden of death duty largely falls not on the super rich, who can often afford to use tax avoidance schemes, but on millions of hard-pressed families struggling on modest incomes.


Again, how many millions? Are we talking half the UK's population? If that were the case, then I could see a case for drastic reform. If we're talking about a million families, then the case is much weaker. And how do you define "modest" and "hard-pressed"?

For all the anguish it causes, inheritance tax raises a tiny proportion of the Government’s revenue, less than one per cent.


One per cent (£5.16bn in FY 06/07) could still build a hospital or two, I'll be bound. And (yet again) how much anguish does it cause, and to whom exactly?

Supporters of this petition believe that inheritance tax is inherently unfair and should therefore be abolished outright in the Chancellor's forthcoming Budget.


There's nothing in the petition to explain WHY inheritance tax is inherently unfair. If IHT's now embracing average families because of the way it's structured, then by all means reform it. But why abolition?

I see that the Daily Express are the inspiration behind this petition. (So it's not an "official" petition at all.) All their protestations of "millions of hard-pressed families struggling on modest incomes" don't really impress me that much - their typical reader is to be found in comfortably well-off suburbs like Wimbledon or Sutton Coldfield rather than Handsworth or Moss Side. How come they're suddenly showing an interest in people with modest incomes? Have they suddenly developed a social conscience, twenty years after Thatcher proclaimed that there was no such thing as society?

No, it seems to me that the people they're really trying to look after are the rich. Not the super-rich, but the kind of people who have substantial money to leave behind to their offspring. Or, perhaps more to the point, the kind of people whose inheritance from their parents would be 66% larger if only IHT were abolished...
Last edited by Dave on Fri 23 Feb 2007 19:27 GMT, edited 1 time in total.
British Newspapers Online - your handy guide to the UK's national, regional and local press!
ErgoGuides - Great travel and business eBooks from British Expat!
Posted by:
User avatar
Dave
Site Admin
 
Posts: 7263
Joined: Tue 21 Jan 2003 15:04 GMT
Location: Currently UK

Postby Graeme » Sun 18 Feb 2007 17:04 GMT

Well said Dave!
I agree. These petitions are for the whiners who don't want to pay into the social network, I'm sure they'd be drawing from it fast enough should the need arise.
I won't be signing.

Graeme :)
Hungry for magazines from Britain? Visit the main web site at http://www.britishexpat.com and satisfy that craving!
Posted by:
User avatar
Graeme
Site Admin
 
Posts: 2129
Joined: Wed 1 Oct 2003 02:14 GMT
Location: British Columbia, Canada.

Postby ruggie » Mon 19 Feb 2007 19:45 GMT

Democracy leads to many taxes on minorities. Inheritance/wealth taxes are only one category, and I'm not in favour of them - however, I shall not be signing this petition. The way it is presented is pure hype, all emotion and no logic or measurable facts on which to make a judgement.

I do agree that fiscal drag has brought a chunk of the middle class into this tax bracket because of the disproportionate rise in the cost of housing - this alone is more likely to influence any future chancellor of the exchequer to raise the bar to retain a few votes than any petition will.

I'm not really sorry for nouveau-riche families - the same skills that gained them their fortunes will probably enable them to pass them on if they think their offspring deserve them. I feel more sympathy for people maintaining and living in ancient piles that aren't that impressive or even comfortable, are expensive to maintain, and are of historic significance or house national treasures. Some of these have market values that reflect what some showbiz personality or foreign magnate would pay for the opportunity to spend the same amount again stripping them out and 'modernising' them to their own tastes.

I've just checked house prices around where we used to live in the mid 1980s. The house we bought for 32,000 and camped in while we were renovating, then sold much later for 175,000 rather than face bankruptcy in 1987 now sells for around 450,000 - so if we'd stayed put and lived like vegetables for 20 years we'd now be well into the IHT bracket. In fact, we'd probably have snuffed it already. Instead, we hope we've given our offspring what they need to find their own way in the world, and will probably spend every penny we have left on looking after ourselves on diminishing pensions (unless I make my fortune from web sites :roll: )
Whether you live in France, or just find the country interesting http://www.franceforfreebooters.com/201 ... nts-up-50/
Posted by:
ruggie
Supporter
 
Posts: 3196
Joined: Sun 28 Nov 2004 09:09 GMT
Location: France


Return to Opinions/Politics



cron