As house prices have risen over the years, so have arguments over inheritance tax.
No longer the death duty of old, forcing the impoverished aristocracy to flog a few paintings from the family collection now and again, IHT has hit mainstream middle England. It has arguably overtaken council tax as the most politicised duty after income tax — witness the electric effect on Conservative fortunes when they pledged to raise the threshold to one million pounds at last Autumn’s party conference.
Opponents say IHT is basically unfair, the final insult that plunders estates on which all sorts of tax has already been paid and which grabs our money from the hands of our children.
But many in the Labour party see it as a wrecking ball to help demolish the walls of social inequality, as an open letter to Gordon Brown from a group of Labour MPs and academics shows.
Reduce IHT and you reduce your chances of encouraging social mobility and spreading the benefits of wealth, they say.
Do you agree? Should inheritance tax be going up, rather than down?
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20 comments so far
The politics of greed and envy. These mean-spirited little people belong in the early part of the last century with their dead ideology.
The keys to equality and high achievement are in strong families and first rate education for all - the two things that Labour have tried their best to destroy.
- Posted by Mike TThe rich and the super rich can always hire someone to find ways to avoid such a tax. Those at the bottom will not have to pay it. That leaves those in the middle again to pick up the bill.
Many of those in the middle are property rich only, so they will have to sell their homes to pay the tax.
This is social engineering?????
- Posted by Tony DharwarIf IHT were not in place we would never have got away from the bred in unfairness that existed before the war. The future does not lie in a return to the Gilded Age.
- Posted by KennethKenneth - you are mssing the point. Those that should pay will not - they will move their money abroad. Money now can move from one side of the world to the other instantly.
The rich / super rich in the first part of the last century could not move their country homes and estates - so had to pay.
- Posted by Tony DharwarWhat else would one expect from old Labour thieves and losers?
- Posted by ian fitzsimmonsEr, correct me if I am wrong, but obviously the Labour Government would merely squander the tax, which would go into more wastage, cover over more cracks, and be totally pointless. Like the disconnect between taxing motorists, and that spend on R&D and infrastructure for them. Like the record spend on the NHS which has meant we are worse off.
Its just a cash cow. Again and again, socialist economics destroyed this country.
He who forgets the past is condemned to repeat it..
Not with my vote. No more Labour incompetence please. No more class war on the Middle Classes please. We are taxed enough. Inheritence Tax is an abomination and does SQUAT. NOTHING to enable the worse off to better themselves. It is just theft, like most taxes from this inept treasury.
- Posted by David HumeAnybody care to hazard a guess as to the proportion of people eligible for inheritance tax? 10%? 25%? 50%? 100%?
- Posted by Matthew Milnes(Clue: all wrong)
The most efficient way of encouraging social mobility is for those with to give to those without. Governments are not that good at acting as intermediaries. I work in wealth management and one of the questions I raise with my clients is “How much is too much?” to leave to your kids. Not that many want to leave spoilt brats.
Plan to give and the taxman need never be involved. So, set the level for IHT higher and the rates higher. Then we can have more philanthropy and the world can become a better place.
- Posted by Osmond PlummerAnybody care to hazard a guess as to the proportion of signatories to the letter to Gordon Brown (in favour of some form of IHT)who are on a gold plated final salary pension scheme, 10%, 25%, 50%, 100%. It’s easy to be generous and claim the moral high ground when you are already “drinking from the trough” !!.
- Posted by keithwe’ve all paid our taxes in proportion to what we have,and if one person ends up with more it is likely to be what he deserved. To then take this from him and his family via IHT is pure communism, like my wife’s father who was twice imprisoned wthout trial in his native Poland ‘for making too much money’. What Labour MPs cannot accept is that we are not equal in terms of ability, nor is it desirable that we should be, for without individual talent the country is doomed (to a fate like that of communist Poland). And what socialists cannot accept is that the individual is far more likely to spend his inherited money wisely than the spendthrift,unaccountable state.
- Posted by nigel gangeInheritance tax is both unfair and immoral(as is theft). In nearly all European countries not to mention world countries this tax is either not applied or is very minimal. Even former communist countries do not apply this tax, only in the UK.
Lee Prague CZ
- Posted by lee green“We’ve all paid our taxes in proportion to what we have”. Really? So nobody’s got any money in a tax haven then?
If the son of a wealthy man inherits a huge fortune is it ‘likely’ that that’s what he deserves?
By the way, Nigel, is the rate of IHT 100% of the whole estate?
- Posted by Matthew MilnesWe work, we pay tax, we buy things, we pay tax, we even pay tax - on our tax (VAT on fuel). Why shouldn’t we expect our children to be taxed when we die?
The sooner these commies are out the better! It ain’t worth working right now.
- Posted by Rick HoughI think the threshold for inheritance tax must be raised as it is no longer a tax on the very wealthy. Thousands of people with modest incomes are now the target for this tax simply through the value of their houses rising in value. This is something completely beyond their conntrol, so why should they be made to surrender an ever increasing part of their main asset to the Chancellor of the Exchequer?
- Posted by Harry Locksleyabout ineritance tax;
- Posted by Ronthose so called MP dont have anything else to think about except to have an idiotic thinking and wasting time tax payers do not need that OK?
What is the proportion of people liable for this tax, Harry? Falling now, surely, with the fall in property prices (rises in which were unearned in the first place). Given that nobody pays IHT before dying, surely it’s their descendants who are ‘targets’ isn’t it? Are you saying they’d be taxed at 100% on the whole estate?
By the way, in defence of taxation as a principle, how are doctors, teachers, police officers, roads and public transport to be paid for?
- Posted by Matthew MilnesMost replies here badly miss the point. An inheritance tax is not theft as people state, without evidence or argument, as fact. It’s not clear that is a double tax (nor that is any more a double tax than, say, VAT).
The question is this: why should I pay tax on money I earn through hard, daily labour while someone else pays no tax on money received through no effort of their own?
- Posted by John AshburyI started with nothing (did not inherit anything), worked hard and now own a small HiTech company competing internationally. For every person I employ including myself I have to pay about 13% “employers tax” aka national insurance. If we make a profit then i am taxed on that as well of course, when i spend then again pay VAT. So effectively about two thirds of everything we earn in the free market goes as tax without any say.
Should I manage to save or invest anything then I pay tax on what i receive. Unfortunately I have to send my kids to fee paying school since the local schools are so bad. None of us have ever been ill so we’re getting very little back from the huge taxes we pay.
Now these clowns want another cut of anything I have left when i die just so they can waste another trillion. So much for Clown being in favour of the family. Fortunately it looks like they will be thrown out at the next election. If not then I will move myself and the company abroad and the UK will lose out. I don’t want to go but it’s getting to be just like back in the 60s and 70s.
- Posted by tonywI grew up on a counciel estate, I’ve worked hard all my life, paid tax on earnings and tax on savings from my earnings and I resent not being able to pass that money onto my family. 10% IHT would be fine but not 40%. Another argument against high levels of IHT would be that lower levels might encourage more to save for healthcare needs in old age - and boy do we need people to save, as the baby boomers like me become the elderly of tomorrow!
- Posted by sueWhat is unfair about material inequality? On what basis do we assert this? Tax is, effectively, theft; the coerced redistribution of a person’s possesions to which they hold legal title.
- Posted by Bamboo