They’re not the only ones to do this. The Greens managed to make a manifesto commitment to restrict access to c-sections for…well, for no reason at all really. Mental. This isn’t about freedom of speech, but you can’t put people like this on a stage AND claim to be a serious party of government.
I would cite the reply given in Arkel v Pressdram
Flags aren’t really our thing. People don’t avoid putting flags up because they will be viewed as racist/far-right. They just don’t do it because it’s not really what we do. Best thing is to quietly ignore this and wait for silly season to end.
Why don’t we just rename it “estate gift tax” and leave everything else as is?
I suspect a lot of that UK taxable income may not be reported. Only a small proportion of the population fill in a tax return…
It is seen as a tax on death because people prefer to paint it that way, because it makes it sound mean and suits their own position. It’s bollocks.
No - the funds would accumulate offshore, and would pay income to beneficiaries at their marginal tax rate. That would be much more tax efficient for the beneficiaries. That’s just off the top of my head, but it shows how the tax charge could be deferred/mitigated significantly.
So if I have a £10m estate, I can gift it under my will to an offshore entity that pays income to my kids at times when it is tax efficient for them. That is at best a deferral of the income tax charge you describe, and may well see it disappear altogether.
If you were to tax the gifts as income, there would also be the risk that the recipients would be non-resident, so you’d lose all the tax that way. Or people would gift the money to offshore recipients (eg trusts) to avoid the charge.
The problem with this is that it gives up the beauty of IHT, which is that the government controls the probate process, so 100% of the tax base is captured.
It. Hasn’t. Been. Taxed. Not in the vast majority of cases, anyway.
No I misread your post
If you decide to borrow too much, that’s your own risk. Buying your own home puts you in control. That is the only social good of home ownership. It’s messed up in the UK the way we have decided that unearned, untaxed capital gains are a good thing and need to be protected at all costs.
There are benefits to owning a home beyond accumulating wealth in a tax efficient way, you know? Like being in control of your own home and reaping the benefits of investing it (ie you don’t get turfed out on a whim).
“Taxing wealth that has already been taxed” is that phrased we hear time and again. It isn’t true (as James says), and in any event, the tax is borne by the beneficiaries. They haven’t paid a dime in tax on that wealth.
Poor people receiving less and being taxed less. Rich people receiving more and being taxed more. Can you explain to me why this is unfair? 🤔
But then people would gift the money offshore and the onshore beneficiary would never be taxed. Far too easy to avoid. That’s why we have IHT. Probate is a convenient mechanism for the government to apply a charge. Just like buying property and SDLT or selling petrol and fuel duty.
The point would be having somewhere to live. Buying a house is not a speculative way to build dynastic wealth. It’s just owning a home. You may end up staffing the lot on care home fees anyway, you know…
The discretionary trusts of the likes of the Duke of Westminster do pay IHT in the form of the periodic 6% charge every 10 years.
If you were to tax the gifts received in the hands of the recipients, it would be lost if paid to non-resident recipients (as they aren’t taxable in the UK). IHT is not perfect, but it is efficient in terms of capturing the tax base involved (assets of UK domiciled persons).
IHT is not a tax on “death” or “the dead” or “money that’s already been taxed”. It’s a tax on testamentary gifts, ie unearned income.
When you say “paid by the estate”, that means it’s paid by the beneficiaries. The “estate” is a trust held on behalf of the beneficiaries. Dead people can’t pay tax. Because they’re dead and, in the eyes of the law, no longer people…
Informed…obvs
I have no idea what your first post means either, I’m afraid. You’re right that there are many ill-I formed opinions on IHT, and tax in general.
Weird, isn’t it?
Legal advice: regulated.
Investment advice: regulated.
Audit and chartered accountancy: regulated.
Corporate finance: regulated.
Tax advice: go for it, mate.
The existence of a register would imply that the activity is regulated in the first place. Tax advice is not a regulated profession in the UK. That is not the case in many other countries, where it is either part of the legal or accounting professions.
Torsten’s argument makes perfect sense here. IHT exemptions like agricultural land and AIM shares skew investment without any economic or policy basis.
Abolish council tax - it’s a nonsense that is abused by central government.
Abolish NICs and bring them in to income tax. Keep employment qualification for pension, but you don’t have to pay NICs for it, and passive income becomes more fairly taxed.
