Is it time to change inheritance tax?

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blythburgh
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Is it time to change inheritance tax?

Post by blythburgh » Mon Oct 29, 2018 9:46 am

Listening to the radio last night and they had a bit about civil partnerships. A Peer has a Private Members Bill that would enable siblings to have a civil partnership.

The two ladies featured are around 60 and have an adopted son of 18. They are fearful for the future as they bought a house together in London when prices were affordable. Now the property is worth so much that on the death of one inheritance tax will have to be paid on their half of the house. If the value of the house continues to rise then they fear having to sell their home and move away from family, friends and support network. The adopted son is looking for work but assuming he is successful he could easily have to quit his job when his Mother moves. (They could not jointly adopt but all consider themselves to be the Mum).

The Govt. is opposed to the bill and I can see why. But it does raise the fact that the current inheritance system is not fit for purpose when siblings live together.

A pity the Chancellor will not be announcing changes this afternoon although the cost to the treasury will be so minimal, a bit like finding a penny in the street. For some people an amount so small it is not worth stopping to pick up.

(To save you asking, yes we pick up a penny in the street and put it into the copper jar at home, when we have a pound in coppers or 5p's it goes to the corner shop, the pound coin goes into the jar to be taken to a small charity when we go up to North Norfolk.)
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Re: Is it time to change inheritance tax?

Post by pabenny » Mon Oct 29, 2018 10:54 am

There are good reasons to change inheritance tax but this is not one.

Nor is it a reason to change legislation on civil partnerships.

Marriage (and civil partnership is the same in all but name) confers substantial tax benefits, not least that transfers of wealth (property, investments, money) between spouses does not create a taxable event. Most defined benefit pension schemes (including most public sector pensions) pay a pension to the surviving spouse. Permitting 'marriages' like this would create very substantial financial incentives towards bogus intergenerational 'marriages' at the expense of the rest of the population.
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Boro Boy
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Re: Is it time to change inheritance tax?

Post by Boro Boy » Mon Oct 29, 2018 11:03 am

Inheritance tax (IHT) when it was introduced was intended to be a tax on the landed gentry but over the decades it has worked its way thought the strata's of society to those who can barely afford to purchase and manage their own homes; at these levels the costs of administration means the actual Net returns to the Exchequer barely warrant the trouble.

Perhaps now is the time to wipe out this death tax and return it to its original concept for only the super rich?
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Re: Is it time to change inheritance tax?

Post by macliam » Mon Oct 29, 2018 11:16 am

Boro Boy wrote:Inheritance tax (IHT) when it was introduced was intended to be a tax on the landed gentry but over the decades it has worked its way thought the strata's of society to those who can barely afford to purchase and manage their own homes; at these levels the costs of administration means the actual Net returns to the Exchequer barely warrant the trouble.

Perhaps now is the time to wipe out this death tax and return it to its original concept for only the super rich?
All taxes are like this - Income tax was "temporary" and affected only the better off. You can't buy a couple of useless Aircraft Carriers and new Trident submarines without taxing the poor........

The other difference is that the super-rich, like Philip Green, find ways to avoid paying tax at all... and get rewarded for it. So the exchequer concentrates on raising taxes from those who cannot escape it. The world turned upside down.
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Re: Is it time to change inheritance tax?

Post by xxxraichxxx » Mon Oct 29, 2018 11:20 am

blythburgh wrote:Listening to the radio last night and they had a bit about civil partnerships. A Peer has a Private Members Bill that would enable siblings to have a civil partnership.
Should not be allowed to happen
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Re: Is it time to change inheritance tax?

Post by Boro Boy » Mon Oct 29, 2018 11:27 am

blythburgh wrote:Listening to the radio last night and they had a bit about civil partnerships. A Peer has a Private Members Bill that would enable siblings to have a civil partnership.
Am I reading this correctly? The suggestion is that siblings can/will be basically allowed to "marry"? :crazy:

This is the world turned upside down for sure...

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Re: Is it time to change inheritance tax?

Post by William Joseph1 » Mon Oct 29, 2018 11:32 am

Boro Boy wrote:
blythburgh wrote:Listening to the radio last night and they had a bit about civil partnerships. A Peer has a Private Members Bill that would enable siblings to have a civil partnership.
Am I reading this correctly? The suggestion is that siblings can/will be basically allowed to "marry"? :crazy:
This is the world turned upside down for sure...
Just this once I am inclined to agree. If you want to fiddle your tax. I am sure there are other ways to do it.
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Re: Is it time to change inheritance tax?

Post by macliam » Mon Oct 29, 2018 11:40 am

There is a difficulty here - what next?

Mrs.Miggs loves her cats and wants to leave her house to them..... and the government must forego taxes because Mrs.Miggs had a "partnership" with her cats.

Jim down the pub wants to leave his assets to his mates - and, of course, they've "been together" for years.....
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Re: Is it time to change inheritance tax?

Post by Boro Boy » Mon Oct 29, 2018 11:45 am

macliam wrote:There is a difficulty here - what next?

Mrs.Miggs loves her cats and wants to leave her house to them..... and the government must forego taxes because Mrs.Miggs had a "partnership" with her cats.

Jim down the pub wants to leave his assets to his mates - and, of course, they've "been together" for years.....

The Law (or potential law) is an ass!!! :think:
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Re: Is it time to change inheritance tax?

Post by blythburgh » Mon Oct 29, 2018 11:55 am

I do not agree with civil partnerships for siblings but changing inheritance laws so those who live together do not have to sell their home on the death of one of them as can happen under current rules. We do not to force a bereaved spouse to sell their home to pay inheritance tax but we do if they are siblings or even friends who own the property together. This is unfair and needs addressing.

Civil partnerships for siblings or even platonic friends is not the way forward IMHO
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