~| Is Inheritance Tax Immoral? |~

That arguably means your parents have more of a liquidity problem than being genuinely poor.

Its cos it was bought under the councils right to buy scheme, so it was extremely cheap. But in the last 10 years, prices went crazy.

Indeed and that's great. But the fact you have an asset worth hundreds of thousands does mean your not poor, its your choice not to access the liquidity it holds.

But thats really unfair.........the whole point of that scheme was so poorer people could own a house.
It doesn't put me in a fair position, unless I do well in the future.

Ummmmm....no it isn't.

Its something that conflicts me.

On the one hand I believe in individual liberty so I don't see why the state should tell me I can't give my children all my money without being bent over for it but at the same time I do believe in meritocracy and even if the parents earnt the money, just as the son is not responsible for the sins of the father, neither should he really gain from the fathers success.

Even pragmatically I'm conflicted. While the economic argument for inheritance taxes could be made simply as those inheriting (given the high threshold) likely having a propensity to save and therefore the economic damage is likely to minimal. At the same time, the fact that private healthcare and education ECT.. Are vastly superior to their state counterparts, could be used as an argument to support full inheritance on the basis that the individual may put that money to much better use than the state, they will not necessarily spend it on meaningless things or save the cash.

Indeed and that's great. But the fact you have an asset worth hundreds of thousands does mean your not poor, its your choice not to access the liquidity it holds.

in the nature of its taxation policy for the average joe............ erm yes it is.

For the nature of the 1% and elite corporations? hell no. But no ones invited to that party.

That wasn't the point of the scheme...

It puts you in a way more than fair position than someone with parents who do not own property.

Ok found it ...but generally these tenants were those with low incomes.

"The Right to Buy scheme was introduced in 1980 and is designed to help council and housing association tenants in England buy their home at a discount."

Ok found it ...but generally these tenants were those with low incomes.

"The Right to Buy scheme was introduced in 1980 and is designed to help council and housing association tenants in England buy their home at a discount."

Sarcasm detector bleeping?

I think inheritance tax is very moral. I think landed wealth is one of the worst things. Why should your starting position in life be so affected by what your ancestors have done (or inherited themselves)?

Inheritance tax fight against inequality that inevitably builds up over generations (well, most tax does, but inheritances can be huge). Some will always view tax as theft. But if you agree that taxation occurs when money changes hands, why should it be any different when you're talking about down the generations?

Some money should be transferred between generations, but I think the tax should be much more progressive i.e. clobber the very rich.

Actually, inheritance tax only serves to increase the class-divide created through inherited wealth. The upper-classes that have 'old money' are more likely to be able to afford inheritance taxes without having to sell properties, and usually have documents attached to their property (from when it was first bought by their ancestors) protecting it from any such laws. The people generally affected by this type of tax are those of us with parents that have bought property, yet don't have the money to pass down in order to pay the tax that will come with it.


Also, an inheritance is not a bad thing, even for the so-called 'trust fund babies' a lá 'Made in Chelsea'. It's a person's right to pass their wealth on to their children once they die, and I personally believe it should be a tax-free occurrence; there is nothing moral about charging people for dying.

As already discussed, for the common man there is rarely going to be a NEED to sell an inherited house to be able to afford the tax.
And you aren't taxing somebody for dying, you are taxing somebody for the exchange assets. If you have an issue with the taxing of somebody for the exchange of assets then you fundamentally have an issue with taxation. The person who dies isn't taxed a penny. The person who receives the inherited assets is the one that is taxed.

That may be true in plenty of towns but in the most affluent cities (e.g. London) it is rare to find any property worth less than 325k, with the average cost of housing having already passed the half-million mark. So, on a house valued at 500k, the recipient would be required to find £70,000 in order to legally acquire the property. That's not the kind of spare cash many people have lying around, even in houses worth half a million pounds.

Also, this tax isn't comparable with others, such as income tax, as the circumstances under which it is applied mean it is usually harder for the person affected by it to pay it, as even selling a house is not easy in this market, meaning that the (currently grieving) person may have to take a loss on the value of the house, will have to pay the fees (estate agents, etc.) and will still have to pay a tax on the rate that it is valued at (albeit in some cases, not all as inheritance tax differs in some places, or so I'm told.)

Personally, I have no problem with most taxes, such as income tax or council tax etc., though I would perhaps like a bit more say in where they go (that's another kettle-full.) My problem with inheritance tax is that it requires a recently bereft person paying money to a government, despite the amount of taxes and charges that will have been taxed having already been applied to the property in the deceased's life.

And that is the reason why if enough of the inheritance is in property you are able to pay it off over 10 years, as discussed earlier.


And as said above, it can be done over time, and as discussed earlier it shouldn't be that hard, depending on the terms of the 10 year pay back. In fact it should actually be pretty easy to do unless the rules are really arsey.


I would need to do a bit of research first to check some thoughts, but the taxes already paid are largely irrelevant and could be brought up for other matters.

The taxes already paid are as relevant as your comment regarding this being 'just another tax based on the exchange of assets' (apologies for the paraphrasing) if not more-so, as they are all linked to the property, whether direct or indirect. Here's a breakdown:

Average cost of a 2-bed house in London: 514k (for the sake of my mathematical inadequacies I'll round that down to 500)

With that comes estate agent fees (roughly 7-10,000 in total, though it can vary.) These fees will indirectly contribute to taxes, as they're earnings, and so we can say 20% will go to the gov't.

Then there's stamp duty, which is an astounding 4% on properties between 500-1m, so that's another 20k.

Then there's council tax, which can be anything between 1,000 and 3,000 P/A, though not always applicable. However, it's highly unlikely that anybody can manage to buy a house in London for 500k on their own, so for this we'll meet in the middle and say it's at 2k P/A.

So, not including any rates, bills or income taxes other than everything mentioned, a 500k house has already cost the person buying it roughly 30k more in the first year of owning it. Factor in the astronomical interest rates on a mortgage (which will be taxed or, in some cases go directly to the gov't) and the buyer has to find a lot of money to satisfy the demands of buying a place to live. Then, when they're on their deathbed, their children will have to find the 70k (this hypo isn't accounting for inflation, again purely because I'm not great at maths. However, the current London rate of house price inflation is near 20% P/A, which would mean that this person could theoretically buy the house, have it for a year, then die and it would be worth an extra 100k) necessary just to own their family home. That would create an excess total of over 100k on a 500k house before any modifications or bills have been made and paid. It's completely immoral.

Good point, people shouldn't think of it as an inheritance tax, rather think of it as another form of income tax, but really the threshold should be set lower if they're going to have it, after all, it's just another thing that penalises a relatively small number.

Except that it's not usually those people complaining. In the next decade or so, it will be large numbers of people who owned houses or almost any size or value.

If your parents live in London and die - it is very likely that you won't be able to service the inheritance tax liability. In short - you will have to sell it because you can't afford to inherit your family home.

Uh no. It's £325k.

So if your parents own a semi-detached house in the suburbs worth say £450k, you will have to stump up £50,000 to inherit your childhood home.