Inheritance tax

[The Don]

Gift tax

To clarify matters around gift tax in the UK (or to further muddy them)

There is no gift tax in the UK BUT gifts cannot be used as a means of evading inheritance tax.

Daddy Don who has been doing active estate planning for a number of years has done the following:

• Gifted £3000 a year to me and Mrs Don, the maximum gift which does not have any inheritance implications
• Has gifted (with documentation) larger sums. Should he survive 7 years after the date of the gift (and I hope he does) then these gifts would not be subject to inheritance tax

So what you cannot do is gift all you belongings on your deathbed to evade inheritance tax.

In UK tax law on the other hand I could give you a gift of £gajillions and no tax would be payable when the gift was given or on my death so long as I live a further 7 years.

HMRC takes a very dim view of attempting to use gifts to avoid income tax however.

 

[Virus]

I'm in favour of a higher inheritance tax - say, blank up to £250k, 50% over £250k, 60% over £500k, 80% over £1 million, but i'm not sure i'd go so far as to support 100% inheritance tax. I think there should be some exceptions and reductions though, such as for parents who die young enough to still have kids under 18.

Why?

 

[McHrozni]

Based on that argument, nothing is fair.

A non-sequitur if I ever saw one. If one can find a legitemate argument against fairness of any tax, this does not mean one can find a legitemate argument against fairness of anything.
To use an analogy to your argument, if all cheating is unfair, then everything else must be unfair too!

Or we could put it upside down and equally well claim that from some POV, all taxes are fair.

Hans

I'm sorry, this is just nonsense.

McHrozni

 

[MRC_Hans]

A non-sequitur if I ever saw one. If one can find a legitemate argument against fairness of any tax, this does not mean one can find a legitemate argument against fairness of anything.

I don't say it follows, I claim you can argue the fairness of anything. Try me.

To use an analogy to your argument, if all cheating is unfair, then everything else must be unfair too!

False analogy. Cheating =/= taxes.

I'm sorry, this is just nonsense.

Not at all. If you will argue that all taxes are unfair because you can find that each tax is unfair in some given case, then it follows that you can argue that all taxes are fair as long as you can argue that each tax is fair in some case.

ETA: Let's cut to the chase: My point is that you make a special case for taxes: Since taxes are never 100% fair, taxes are unfair. But nothing is 100% fair. You would not set this standard for other things in life. 'Fair' =/= 'perfect.

Hans

 

[Last of the Fraggles]

Or you could view it as simple income. Otherwise you could also argue that your employer already paid tax, so why must you? Tax is paid every time money changes hands.

Hans

My salary is a deduction for the company so surely they don't pay tax on it, only on the profits that my labour creates for the business?

Similarly savings are not taxed, only the interest on the savings are taxed.

I don't think there are all that many examples of where something is taxed twice, though I'm sure they exist.

 

[Ivor the Engineer]

Isn't one of the problems with inheritance that it concentrates wealth? If so a better way might be to tax those who inherit from an estate based on the amount they inherit rather than the estate itself. The total amount a person could inherit could be capped as well.

 

[McHrozni]

--
(delete if possible?)

 

[ponderingturtle]

Originally Posted by MRC_Hans
Or you could view it as simple income. Otherwise you could also argue that your employer already paid tax, so why must you? Tax is paid every time money changes hands.

Hans

My salary is a deduction for the company so surely they don't pay tax on it, only on the profits that my labour creates for the business?

Similarly savings are not taxed, only the interest on the savings are taxed.

I don't think there are all that many examples of where something is taxed twice, though I'm sure they exist.

Try paying a plumber, he has to pay taxes on the money you already were taxed on. Tax can be added to any transaction.

 

[McHrozni]

I don't say it follows, I claim you can argue the fairness of anything. Try me.

You probably missed the qualifier "legitemately", which I put there for the exact purpose to avoid this pitiful argument.

Your argument is inherently false, however, as you already noted below.

False analogy. Cheating =/= taxes.

Exactly. You, however, claimed everything is equivalent to taxes, and thus just proved me right.

Not at all. If you will argue that all taxes are unfair because you can find that each tax is unfair in some given case, then it follows that you can argue that all taxes are fair as long as you can argue that each tax is fair in some case.

I really don't see how this relates to my argument. It's not that taxes are unfair in some case and fair in another, it's that all taxes are inherently unfair in some way at all times. That they aren't unfair in other ways is immaterial. Fair and unfair are not equivalents, just as clean and unclean aren't. You won't call a T-Shirt that's stained with oil but not blood "clean", would you?

ETA: Let's cut to the chase: My point is that you make a special case for taxes: Since taxes are never 100% fair, taxes are unfair.

Which is almost exactly what I already said, except that you removed "to a certain degree" for an unknown reason. There is nothing special about the taxes though, other things can also be inherently flawed to the point of not being able to be fair.

McHrozni

 

[Professor Yaffle]

Why?

I have a feeling stokes will answer something related to the societal benefits of reducing the amount of inequality...

http://www.equalitytrust.org.uk/why

 

[Last of the Fraggles]

Try paying a plumber, he has to pay taxes on the money you already were taxed on. Tax can be added to any transaction.

I did think about this, and initially had VAT as my example of double tax but convinced myself its not the case and then wavered back and forwards and then gave up.

 

[MRC_Hans]

My salary is a deduction for the company so surely they don't pay tax on it, only on the profits that my labour creates for the business?

Ahh, true. But once you spend the money....

Similarly savings are not taxed, only the interest on the savings are taxed.

That differs. We don't currently tax fortunes here, but wait for the new government....

I don't think there are all that many examples of where something is taxed twice, though I'm sure they exist.

Basically, everything goes around, and is taxed on each round.

Hans

 

[Darat]

The person can write a last will!

Again I'd be happy with that, I can't see why if identity can be verified why such "wills" can't be dictated by automatic writing.

 

[MRC_Hans]

Which is almost exactly what I already said, except that you removed "to a certain degree" for an unknown reason. There is nothing special about the taxes though, other things can also be inherently flawed to the point of not being able to be fair.

McHrozni

Well, let's say we are close enough. I don't think taxes are 'inherently' flawed, but ......

Hans

 

[Ivor the Engineer]

Again I'd be happy with that, I can't see why if identity can be verified why such "wills" can't be dictated by automatic writing.

Right now I wish that was the case.

Ah well, guess I can kiss goodbye to any hopes of going to a 3-day week.

 

[McHrozni]

Well, let's say we are close enough. I don't think taxes are 'inherently' flawed, but ......

Hans

... it's a matter of opinion. I can live with that

McHrozni

 

[The Don]

Isn't one of the problems with inheritance that it concentrates wealth? If so a better way might be to tax those who inherit from an estate based on the amount they inherit rather than the estate itself. The total amount a person could inherit could be capped as well.

By taxing the estate you only have a single transaction to track and a single tax exempt allowance to manage. If all bequests get taxed it becomes a nightmare especially if some of them are going overseas.

I can see the fairness in the proposal, I just think it's be administratively expensive to implement.

 

[Ivor the Engineer]

By taxing the estate you only have a single transaction to track and a single tax exempt allowance to manage. If all bequests get taxed it becomes a nightmare especially if some of them are going overseas.

I can see the fairness in the proposal, I just think it's be administratively expensive to implement.

Seems only a little more complicated than dealing with the intestacy rules when there is no will.

 

[Stacko]

Try paying a plumber, he has to pay taxes on the money you already were taxed on. Tax can be added to any transaction.

Unless you're paying your plumber in cash.

 

[Jaggy Bunnet]

In UK tax law on the other hand I could give you a gift of £gajillions and no tax would be payable when the gift was given or on my death so long as I live a further 7 years.

If you live for a further 7 years after your death, you deserve to pay no tax.