Why do most people in the UK want inheritance tax abolished ?

[Duke Wellington]

13 hours ago, pellinore said:

It's counter-intuitive, isn't it? You've just echoed the normal response people give towards IT, whether they are affected by it or not. It is the same simplistic thinking that leads people on low incomes to argue that everybody should have income tax reduced or abolished, because it is "their" money. In fact, to promote fairness, IT should be reformed and, obviously, increased. This is not socialism, this is just a fair(ish) way to provide the infrastructure all modern societies need.

12. Inheritance tax as currently designed has only a small impact on the distribution of inheritances received and therefore on intergenerational wealth mobility. The wealthiest fifth of donors will bequeath an average of around £380,000 per child, and pay inheritance tax of around 10% of this amount. By contrast, the least wealthy fifth of parents will leave less than £2,000 per child. To have a larger impact on intergenerational mobility, inheritance tax would have to be substantially expanded in scope.

13. By the time inheritances are received, wealth inequality is already substantial. Inheritances are most often received when people are in their late 50s or early 60s. Around the ages of 50–54, children of the wealthiest fifth of parents have an average of £830,000 in wealth, while children of the least wealthy fifth have on average £180,000. While a reformed inheritance tax could do more to promote intergenerational mobility, big wealth inequalities by parental background already exist before inheritances are received.

Reforming inheritance tax | Institute for Fiscal Studies (ifs.org.uk)

Lets say I am a highly qualified IT director earning £200k per year.

To begin with the government takes 45% of it as income tax. So thats me straight down to £110k. With national insurance thats another £7.5k so now I`m down to £102.5k. Lets pretend it all gets passed on to my children just to make a point. Inheritance tax is 40% reducing that in this scenario which doesn`t include anything being spent on mortgage, living, etc. So after inheritance tax it leaves £61.5k. Do you think that is fair?

In practice maybe the company you are a director at helped you out of that absurd mess by paying a chunk of your wages as share options. Maybe they even setup your employment with them allowing you to incorporate yourself so you could escape that absurd tax burden. Whether they did or not, that is in no way shape or form fair for those having their wealth decimated by the state. Some of that is open socialism, paying high taxes to prop up those who contribute little of value towards society. Some of it is hidden socialism, as in lets tax your wealth before it hits your children to fund the NHS, education, police, and a social security net for others. 

We should be living in a state where it pays to contribute the most in terms of products and services to consumers. Instead of carrying others, they should have to pay for themselves. I propose:

Low income Tax Bracket - 80%

Middle income Tax Bracket - 40%

Upper income Tax Bracket - 0%

Scrap inheritance tax, cap national insurance contributions, but also maximise it to that cap for all. If a person doesn`t contribute the same value that they take out then they don`t get. Limit them to soup kitchens, clothes from charity shops, and emergency treatment only.

By dismantling the socialism present in our state then lower and middle incomes will sky rocket. Why will lower and middle incomes sky rocket? Well companies will have to pay them more and will be able to afford too because their side of employee taxes would be removed. That pay far more employer national insurance contributions that what employees do. Our GDP will also sky rocket. We will become like the USA doubling our GDP. In fact it would be more than that because we would have less socialism that what the USA does.

Socialism is designed to ease the poverty of the weakest in society. But in doing so it increases the number of low income households by taking others wealth away, pricing our companies out of price sensitive markets, and limiting job creation. So in a state where the weakest in society are 1 million then socialism turns that into 20 million. But hey, we are all together right? I believe thats their mantra. We can all be low income households together!!! All in a state where the only companies left are state owned. And make no mistake, that is where More Socialism!!! ultimately leads too.

With the low income households being punished perhaps they will start bringing their children up properly so that they do better at their education.

[Grey Area]

8 hours ago, Electric Scooter said:

To begin with the government takes 45% of it as income tax. So thats me straight down to £110k. With national insurance thats another £7.5k so now I`m down to £102.5k. Lets pretend it all gets passed on to my children just to make a point. Inheritance tax is 40% reducing that in this scenario which doesn`t include anything being spent on mortgage, living, etc. So after inheritance tax it leaves £61.5k. Do you think that is fair?

I would imagine in that scenario, you will be going to a highly qualified accountant to engage in some tax advice.

But your calculations are not sound, inheritance tax will affect your assets at the time of death, not your income as you earn it.  That exec might be spending 50% of their monthly earnings on holidays and golf club membership, and it’s 40% of your assets above the aforementioned threshold, which if you are savvy can be as high as £1million.

8 hours ago, Electric Scooter said:

In practice maybe the company you are a director at helped you out of that absurd mess by paying a chunk of your wages as share options. Maybe they even setup your employment with them allowing you to incorporate yourself so you could escape that absurd tax burden. Whether they did or not, that is in no way shape or form fair for those having their wealth decimated by the state.

I think you will struggle to find a great deal of sympathy for the exec in your example that is unable to live on their net salary.

8 hours ago, Electric Scooter said:

We should be living in a state where it pays to contribute the most in terms of products and services to consumers. Instead of carrying others, they should have to pay for themselves. I propose:

It does pay, what world are you living in?

If you are in a company that is providing the most products and services to consumers you are running a successful business and earning a profit.

If tax thresholds were lowered, do you think corporations would keep the same payroll levels?

8 hours ago, Electric Scooter said:

Low income Tax Bracket - 80%

Middle income Tax Bracket - 40%

Upper income Tax Bracket - 0%

This is ridiculous.  You would be reducing the spending power of tens of millions of consumers to effectively zero, and increasing the need for state assistance, due to millions of people literally dying on the street.

8 hours ago, Electric Scooter said:

Scrap inheritance tax, cap national insurance contributions, but also maximise it to that cap for all. If a person doesn`t contribute the same value that they take out then they don`t get. Limit them to soup kitchens, clothes from charity shops, and emergency treatment only.

So confine them to handouts…. Isn’t that socialism?

9 hours ago, Electric Scooter said:

Well companies will have to pay them more and will be able to afford too because their side of employee taxes would be removed. That pay far more employer national insurance contributions that what employees do. Our GDP will also sky rocket. We will become like the USA doubling our GDP. In fact it would be more than that because we would have less socialism that what the USA does.

No you dolt, they won’t sky rocket… Why?

Because the overwhelming majority of people won’t have the purchasing power to utilise the products and services these higher earners offer.  Alternatively you’d be relying on those higher earners to compensate for the loss of revenues from the lower earners, thus reducing their income.

Companies and corporations would collapse within months, and those high earners would be unemployed.

9 hours ago, Electric Scooter said:

Socialism is designed to ease the poverty of the weakest in society. But in doing so it increases the number of low income households by taking others wealth away, pricing our companies out of price sensitive markets, and limiting job creation. So in a state where the weakest in society are 1 million then socialism turns that into 20 million. But hey, we are all together right? I believe thats their mantra. We can all be low income households together!!! All in a state where the only companies left are state owned. And make no mistake, that is where More Socialism!!! ultimately leads too.

Who is talking about ‘more socialism’?

And right now, with the amount of social housing that was sold off and companies that were traditionally state owned, like utilities and rail we have less socialism than we ever had in the last 80 years.

9 hours ago, Electric Scooter said:

With the low income households being punished perhaps they will start bringing their children up properly so that they do better at their education.

Being punished for what?  And why do you assume that the ratio of children not ‘properly brought’ up is higher in low income families.

Do you include yourself in that above statement?  because suggesting that the penalty for not earning enough is misery and ultimately death, certainly has me questioning the standards of your upbringing.

[Duke Wellington]

2 hours ago, Grey Area said:

1. I would imagine in that scenario, you will be going to a highly qualified accountant to engage in some tax advice.

2. But your calculations are not sound, inheritance tax will affect your assets at the time of death, not your income as you earn it.  That exec might be spending 50% of their monthly earnings on holidays and golf club membership, and it’s 40% of your assets above the aforementioned threshold, which if you are savvy can be as high as £1million.

3. I think you will struggle to find a great deal of sympathy for the exec in your example that is unable to live on their net salary.

4. It does pay, what world are you living in?

5. If tax thresholds were lowered, do you think corporations would keep the same payroll levels?

6. This is ridiculous.  You would be reducing the spending power of tens of millions of consumers to effectively zero, and increasing the need for state assistance, due to millions of people literally dying on the street.

7. So confine them to handouts…. Isn’t that socialism?

8. Companies and corporations would collapse within months, and those high earners would be unemployed.

9. And right now, with the amount of social housing that was sold off and companies that were traditionally state owned, like utilities and rail we have less socialism than we ever had in the last 80 years.

10. Being punished for what?  And why do you assume that the ratio of children not ‘properly brought’ up is higher in low income families.

11. Do you include yourself in that above statement?  because suggesting that the penalty for not earning enough is misery and ultimately death, certainly has me questioning the standards of your upbringing.

1. You don`t need a highly qualified accountant as large businesses have their own accounting staff. What is needed is an employer willing to treat you as a supplier or willing to pay most of your wage to you in shares.

2. Partially a good point, good in that you pointed out its even worse. Thats right inheritance tax is a tax at the time of death. Meaning before then the BoE can depreciate the value of your savings using inflation.

3. I would suggest the OP survey would disagree with you. Hence why we are here discussing it.

4. Sure you can live comfortably off £65k per annum, heck you can even do so off £30k per annum so long as its not in London. The issues is not if people can live off their nice wage, its whether its fair to tax so much away from them.

5. Yes. With no employer national insurance contributions that can be paid to employees instead. Furthermore the economic growth would make the UK like the US where incomes are doubled. In fact, as I stated, it would be better than that as we would have less socialism that the US.

6. Not so, you fail to factor in the resultant economic growth and rise in wages. For the million poor I have nothing against then using soup kitchens or clothing from charity shops.

7. Its the bare minimum of socialism I can recommend unless you want the bottom million to die.

8. There is no logical reason for that. By not paying employer national insurance contributions and giving it to the employees instead there is no material difference in operating costs.

9. A good point. We would need soup kitchens, charity shop clothing, and have you ever seen those Sleeping Pods at Japanese train stations. We could construct 1000s of them for the homeless. They are smaller than prison cells, they wont take up much room.

10. Punished for success. And, well, the low income families are doing something wrong if their kids have no education plan and life plan to earn enough.

11. Not at all, the bare minimum stops death. I think its funny that the mantra of successful people being corrupt and exploiting others is advocated and promoted by low income lefties. They expect after directing that attitude at the successful then those with success should care about their struggle. We dont, we care about the successful and only the low incomers who have the right attitude to actually get somewhere in life. Those we help get somewhere. Its also offensive when confronted with one who is obviously selfish, self-centred, corrupt in that they lie and cheat and manipulate to try and get someone, and then sit there claiming they are morally just and its the successful who are corrupt. Those are my favourite ones, I have never promoted one in my life and never will.

[pellinore]

12 hours ago, Electric Scooter said:

Lets say I am a highly qualified IT director earning £200k per year.

I would never say that, Cookie. I think you probably earn minimum wage working as a porter somewhere. Remember @stevewinn, who used to say he worked as an importer/exporter? Turned out he worked in a warehouse loading and unloading lorries.

[pellinore]

13 hours ago, Setton said:

That's not the same as someone who built themselves up from nothing then being told they can't leave their home to their children because the government is going to take a chunk of it. 

You say you support reform to promote 'intergenerational mobility'. How is it meant to be 'intergenerational' if each successful generation has to give a chunk to the tax man?

I'm surprised at you, Setton. In the sentence I have boldened you have conflated ideas to create falsehoods- I never said people can't leave property to their children, I just said it should be taxed. And then in the second sentence you object to tax outright. What is wrong with giving a chunk to the tax man?

 

 

[Duke Wellington]

1 hour ago, pellinore said:

I would never say that, Cookie. I think you probably earn minimum wage working as a porter somewhere. Remember @stevewinn, who used to say he worked as an importer/exporter? Turned out he worked in a warehouse loading and unloading lorries.

What happened to him, I hope coronavirus didn`t get him, he was one of my favourite members. Annoying Helen vanished too, I suspect she is in Ukraine fighting against the Soviets. Another favourite of mine but I wouldn`t had admitted that if she was still around.

With my own employment I`m not discussing it, you will never know!!! I do alright is all I will say. I have weird beliefs about how to become successful if you ever want to hear them. They work but are completely at odds with how people believe the world works.

[Setton]

20 hours ago, pellinore said:

I'm surprised at you, Setton. In the sentence I have boldened you have conflated ideas to create falsehoods- I never said people can't leave property to their children, I just said it should be taxed.

Well see if he has to give a chunk to the tax man, he can't leave that chunk to his children, can he?

Quote

And then in the second sentence you object to tax outright. What is wrong with giving a chunk to the tax man?

Nothing wrong with taxes in general. That's why he paid tax on it when he earned it.

What I object to is the expectation that he should pay tax twice, when other people only pay once.

[pellinore]

22 hours ago, Electric Scooter said:

What happened to him, I hope coronavirus didn`t get him, he was one of my favourite members. Annoying Helen vanished too, I suspect she is in Ukraine fighting against the Soviets. Another favourite of mine but I wouldn`t had admitted that if she was still around.

With my own employment I`m not discussing it, you will never know!!! I do alright is all I will say. I have weird beliefs about how to become successful if you ever want to hear them. They work but are completely at odds with how people believe the world works.

I don't think stevewinn was taken by Covid, he probably just got bored arguing with me.  I still have some slight contact with Helen, and yes, you are on the right lines with her.

With regard to your employment, you are right, I have no idea, you may be a millionaire for all I know, but I do get irritated by people quoting the tax problems of people on £200k per year- if you get paid £10k per month after tax, then you will have no idea what it means to be waiting on your monthly pay to settle a bill for an MOT or boiler repair. Just saying.

[Duke Wellington]

6 minutes ago, pellinore said:

I don't think stevewinn was taken by Covid, he probably just got bored arguing with me.  I still have some slight contact with Helen, and yes, you are on the right lines with her.

With regard to your employment, you are right, I have no idea, you may be a millionaire for all I know, but I do get irritated by people quoting the tax problems of people on £200k per year- if you get paid £10k per month after tax, then you will have no idea what it means to be waiting on your monthly pay to settle a bill for an MOT or boiler repair. Just saying.

Its not an excuse for Robin Hood taxes though.

[pellinore]

3 hours ago, Setton said:

What I object to is the expectation that he should pay tax twice, when other people only pay once.

Who only pays tax once? Only the wealthy who are able to avoid tax as far as they are able. Do you really believe there is some divine law that tax should only be paid once? Perhaps God has ordained that no one should pay tax on their hard-earned income even once? Rees Mogg recently tried to remove £400 million overseas to avoid tax, presumably the justification was that tax was paid multiple times by his employees while they worked for him amassing it. To be honest, I am very disappointed in you, Setton. Most people on UM are right wing, but there are a few who have some idea of fairness. But dig deep and off they go about "we need to keep it all for ourselves", even if they have very little to actually keep. @Grey Area disappointed me in the same way- sounds sane in the beginning, but off he goes about WEF, European superstates, GBNews/Farage free-speech nonsense until it is indistinguishable from the nonsense Dan Wootton spouts in the Express.

 

[pellinore]

2 minutes ago, Electric Scooter said:

Its not an excuse for Robin Hood taxes though.

I know, Cookie. I agree, except some people like me, not wealthy, but not poor either, don't have to worry about bills. You may be the same. But I do believe some people do have problems with bills, and I think our country is wealthy enough to help them if we cared enough.

[Tatetopa]

I don't know how it works over there, in the US there is a large set aside before any inheritance taxes,

The wealthy have it figured out and have convinced you of their viewpoint.

Self-made is a myth for the peasants to keep them distracted.  To join the circle of international global elites that decide how the common folk live or if they die, you have to amass a fortune of hundreds of billions or trillions of dollars.  One way to do that is an untaxed family fortune that grows over a couple of centuries.  I am sure they will appreciate your help in keeping that untaxed.

[Grey Area]

9 hours ago, pellinore said:

@Grey Area disappointed me in the same way- sounds sane in the beginning, but off he goes about WEF, European superstates, GBNews/Farage free-speech nonsense until it is indistinguishable from the nonsense Dan Wootton spouts in the Express.

I’d love you to quote me where I talk about all that.  You seem to mistake me for someone else quite often.

I have stated numerous times in this thread I am on the fence about inheritance tax.  But I can see, human nature being what it is, and the complexities around taxation in general, that most normal people will naturally oppose a tax on death.

Finally nobody likes taxes.  I struggle to see how opposition to this should be surprising.

[Setton]

9 hours ago, pellinore said:

Who only pays tax once?

Where else do you get taxed twice on the same income?

[pellinore]

13 hours ago, Setton said:

Where else do you get taxed twice on the same income?

I pay income tax, I put some of my money into an investment bank. Then they tax me on the interest my own money earns that I have already paid tax on! Anyway, that is beside the point, there is no divine or natural law that tax only has to be paid once in our lifetime (or death). In fact, if there was a divine law, death tax would be the only fair one, as it would be the only one that the person concerned would not notice in the slightest.

[pellinore]

14 hours ago, Grey Area said:

I’d love you to quote me where I talk about all that.  You seem to mistake me for someone else quite often.

A few years ago, you said you supported Brexit, but you didn't want to discuss your reasons why you did. I find that quite difficult to accept- you support something that has caused huge damage to the UK, that even at the time barely 50% of the people who voted agreed with (we don't know how the non-voters who were eligible to vote would have reacted, but we know many didn't bother as they though it was too idiotic and was an advisable referendum anyway), that now 60% of the population and growing think was idiotic, and is becoming more divisive not less divisive as the damage becomes more apparent.

Why won't you discuss it? If it is not your fear of a federal Europe/WEF/Big Pharma? etc what is it about? If it is apparent that you made the right decision, why not boast about it? Why not tell us why Brexit has been successful? What have we gained? Less immigration?  An economic advantage? More global significance? Greater autonomy? Increased wealth and improved public services? More equality between the poor and the rich? More equality between the North and the South? Cleaner beaches and rivers? More honesty and accountability in politics? Politicians who put the UK first? The country is gagging to know, because it seems to most people that the opposite has occurred to everything promised.

Instead, you intimate you have some secret knowledge about the EU, global economies, or some international political network, but won't say what it is. Go on, @Grey Area, you are not stupid, just give us some hint as to how we have benefited since 2016. It would be so nice to know all this destruction has benefited us in some way.

[pellinore]

19 hours ago, Tatetopa said:

The wealthy have it figured out and have convinced you of their viewpoint.

Self-made is a myth for the peasants to keep them distracted. 

The gulf between the wealthy and the poor is so huge they can't see each other's viewpoints. Up to my 30s I rented, was always overdrawn and my concern was paying bills. 30 years on, my concern is where to move my (still pitifully meagre) savings to get the best interest rates as each month I save money (this is not due to any financial astuteness on my part, I am a Boomer and we made money through property price increases). I live in the town that makes Sunseeker Yachts (start price c.£10 million) and Sandbanks Harbour (av. house price £10 million). I have nothing in common with them, but I also have nothing in common with people who need food banks, who also live in our town.

I have nothing against and no interest in the people who are super-rich. But I have a bit of a resentment against people who are very poor, but for some reason want the rich to be richer at their expense. They vote for political parties who do not support them (but say they do), and they get caught up in culture wars which defect them from what is actually going on.

[Grey Area]

11 minutes ago, pellinore said:

A few years ago, you said you supported Brexit, but you didn't want to discuss your reasons why you did. I find that quite difficult to accept- you support something that has caused huge damage to the UK, that even at the time barely 50% of the people who voted agreed with (we don't know how the non-voters who were eligible to vote would have reacted, but we know many didn't bother as they though it was too idiotic and was an advisable referendum anyway), that now 60% of the population and growing think was idiotic, and is becoming more divisive not less divisive as the damage becomes more apparent.

Why won't you discuss it? If it is not your fear of a federal Europe/WEF/Big Pharma? etc what is it about? If it is apparent that you made the right decision, why not boast about it? Why not tell us why Brexit has been successful? What have we gained? Less immigration?  An economic advantage? More global significance? Greater autonomy? Increased wealth and improved public services? More equality between the poor and the rich? More equality between the North and the South? Cleaner beaches and rivers? More honesty and accountability in politics? Politicians who put the UK first? The country is gagging to know, because it seems to most people that the opposite has occurred to everything promised.

Instead, you intimate you have some secret knowledge about the EU, global economies, or some international political network, but won't say what it is. Go on, @Grey Area, you are not stupid, just give us some hint as to how we have benefited since 2016. It would be so nice to know all this destruction has benefited us in some way.

This is a thread about inheritance tax, you created it, but of course you couldn’t help yourself.

I’m not engaging with you over Brexit.  It’s a self serving activity that satisfies some deep seated anger issues you have.  I am not prepared to be your personal punching bag.  

Get some help dude.

[pellinore]

10 minutes ago, Grey Area said:

This is a thread about inheritance tax, you created it, but of course you couldn’t help yourself.

I’m not engaging with you over Brexit.  It’s a self serving activity that satisfies some deep seated anger issues you have.  I am not prepared to be your personal punching bag.  

Get some help dude.

I was just asking you explain why you support something you are now ashamed to admitting to support. Even Tim Martin and Farage have admitted they made a mistake. You are the one who needs help, the cognitive dissonance will get worse for you. And you have the audacity to ask me to get help to deal with something that is an obvious problem for the UK? What we need to do is rejoin. Simples.

Edit: I'll just add, being a xenophobe is nothing to be ashamed of.

Edited October 5, 2023 by pellinore

[TigerBright19]

Never thought about this topic before, but after my parents divorced my father left England and moved to America with his new American wife.  She is certainly on the wealthy list, but my father still retains his British passport and citizenship.  Does that mean the UK inheritance tax laws apply to him and not her?  Can it lead to a legal blind spot because if she passed away first and left everything to him she would have to abide US law, but if he went first, then he would have to abide British law?  Is this why wealthy retired actors and business men move out of the UK to avoid these taxes?

 

 

[Grey Area]

7 hours ago, pellinore said:

I was just asking you explain why you support something you are now ashamed to admitting to support. Even Tim Martin and Farage have admitted they made a mistake. You are the one who needs help, the cognitive dissonance will get worse for you. And you have the audacity to ask me to get help to deal with something that is an obvious problem for the UK? What we need to do is rejoin. Simples.

Edit: I'll just add, being a xenophobe is nothing to be ashamed of.

There’s no shame or xenophobia there.  I have explained my reasoning, you are simply not a person I wish to have this conversation with, it would not be a 2 way discourse, you are not interested in an open or honest debate and there is nothing to be gained.

You have clearly pre-judged me and have some image in your mind based on comments you think I have made in the past.

I would urge you to go back and find any comments I have made that support your flawed character analysis, and perhaps I’ll respond, otherwise stop highjacking threads and move on.

[itsnotoutthere]

" I'll just add, being a xenophobe is nothing to be ashamed of."

Good for you, being able to admit that to yourself is brave step in the right direction. 

[Grey Area]

1 hour ago, itsnotoutthere said:

" I'll just add, being a xenophobe is nothing to be ashamed of."

Good for you, being able to admit that to yourself is brave step in the right direction. 

It’s a goad, it’s a not very cleverly disguised attempt at flame baiting.

Sad really.

[OpenMindedSceptic]

My house is £3.2M at current values.

To buy it I had to:

- create three businesses not even knowing whether they'd work out. I paid to get them registered at Companies House, ICO, HMRC

- I then created wealth, I employ 175 people across 3 businesses - that equates to eye watering sums of NIC, income tax and BIK taxes

- then for my bit of pay when there was profit, I pay the government 19% off the profits I generated (soon going up to 25%), then they tax me at 40% of my income or a tax on dividends (so they tax me twice). This allows me to have a mortgage

- When I bought the house, I paid stamp duty, roughly half the costs at 12%, a quarter at 10% or something like that, it was around £400k

- Then they charged me council tax at a premium rate even though I don't have a street lamp, a road sweep, etc

- Then the house need work so I paid VAT on paint, lumber, windows, roof tiles

So my house has generated approx £1.6M to date in money to date from me personally for the government for the temerity to set up a business and use the funds to buy a house after all the risks I took.

The NIC , income tax and BIK etc is a mind-blowing amount on top of that figure. That's what that house represents.

Now, when I die, you argue that the house should be taxed again?

The equivalent of half the sale price has been given in tax already where a good half of the population pay hardly any tax  (about £7k a year on average salary in the UK?)- I've paid enough, many lifetimes equivalent of tax for the average worker (approx 230 years equivalent in the last 10 years) after all the risks and setbacks and red tape, and at the point where my family grieve, they shouldn't be asked for more money. IHT is a sickening, diabolical tax.

[itsnotoutthere]

37 minutes ago, Grey Area said:

It’s a goad, it’s a not very cleverly disguised attempt at flame baiting.

Sad really.

Well, suppose everyone has to have a hobby.