Tax the dead and not the living

Am I the only man on the planet sick to death of the sanctimonious rubbish being talked about inheritance tax?

Shadow chancellor George Osborne promises that a future Conservative government would raise the threshold to £1m because families should 'not be punished for working hard and saving hard'.

Garbage. The vast majority of estates being drawn into the IHT net are there purely and simply because property prices have risen. Hard work and 'saving hard' have nothing to do with it.

In fact, these mythical hard-working families much loved by Labour and the Tories are saving less than they ever did. Debt has ballooned to beyond £1,000 billion. As a nation we are living on money we haven't yet earned and the closest thing to hard work in many people's daily lives is figuring out how to juggle their credit card bills.

The notion millions of us will invest an inheritance in a pension fund or to cover future long-term care bills is laughable. We want to sell off gran's old home so we can live like lottery winners for as long as it lasts.

The only thing that might stop us is having to help their kids buy a place of their own. These will cost far more than at present because if Mr Osborne gets his way the hidden price control created by the stamp duty threshold will have been removed for first-time buyers.

One way or another, governments have to raise taxes to give us the services we need. As far as I'm concerned I'd rather the dead paid taxes that would otherwise be imposed on the living.

- Simon Moon, This is Money

• Tory pledge to raise IHT limit to £1m
• How to cut the taxman out of your will
• New crackdown on inheritance tax

Comments

[Mouse]

Simon, stop painting everyone with the same brush! Not everyone is in debt, not everyone wants to sell Granny's house to live it up without a thought for the future. Some of us have worked hard, paid dues and saved as much as we could - particularly those older people who were brought up to believe you saved to buy what you wanted, rather than borrow today to pay back sometime or never. So why shouldn't they be able to pass on their money - on which they've already paid a great deal of tax - to their children? This is no longer a tax on the very rich, with the average property value rising it now includes ordinary hardworking families. So don't assume we would all live like lottery winners until we returned to deep debt - we're not all like you.

[Colin]

It is precisely IHT that encourages spendthrift behaviour.

Why save for the taxman? Just blow it!

[Malcolm]

Living in the south west has caused a problem. I'm sorry simon but you have little or no idea how this tax causes stress and worry to the individuals who are left to administer the estate of the dead.

In the south west, property prices have increased due to limited housing stock, people from the cities moving to the south west looking for a rural life, pushing values up futher. We who live in this area are dealing with IHT limitation as a result the former, and to have this proposed threshold made by the Conservatives is the most sensible statement ever made.

[Tosca]

Emotive situation this. I inherited a house in the south west, where I didn't want to live for various reasons, but partly because of all the incoming nouveau riche who have no idea how to behave towards their fellow man. Not that I didn't take advantage of their greed. Handsomely, thank you.

Yes, it is indeed galling to pay £100k + to the taxman, but on the other hand I wasn't expecting as much as the huge (to me anyway,) amount I have been left with, so one has to be pragmatic. Besides, someone has to pay taxes and I like to believe that the tax I have lost only goes to help deserving causes! Like me, if I ever become very ill, for example.

In this world you reap what you sow . . . and the financial markets are no exception. There is always a price to pay.

[Margaret]

Simon, I think you are being deliberately provocative. Tax is deducted from our income, investments, and almost everything we buy throughout our lives. Taking 40% of an estate over an arbitrarily set threshold is taking away our freedom to decide how our money should be used.

Were we to encash everything and throw it down a drain, there would be no liability. If we make the more responsible decision to help our family and friends, why should the state demand a slice? In my opinion estate duty is merely a tax upon assets which have already been taxed and, as such, is a legalised form of theft.

[Mrs Walden]

I bought my house 30 years ago for c.£13K, now it's valued @ £150K; if we both die @ same time under previous rules the estate would have paid c£44K in tax due to the house, investments & pension funds - we lived within our income and saved as much as we could only to be penalised. I'm thinking I'm the mug for trying to save for the future.

[G Mac]

I totally agree with you Simon and in fact I don't see this article as provocative rather as someone daring to tell it how it is! The issue is the spiralling tax on the smaller and smaller number of responsible, stable and hard working families in this country in my opinion. All the tax breaks go to the people who are loaded with excuses for shirking responsibility, because "they only live once!"