Is inheritance tax justifiable?

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anxiughty
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I wanted to know people's opinions on inheritance tax. Basically, the government (or at least the UK government) taxes you if your family's estate when they die is worth more than £325,000 when they die. Above that threshold, you get taxed 40%, may it be only a penny more or 100,000 more.

Do you think if your inheritance was that much it should be taxed? Why or why not?

(I'm just curious. Currently, I have no stance, hence I wanted to know)

EDIT: if anyone can also explain to me how big of a value £325,000 is, that'd be very helpful as I'm an international student here haha coz to me, thats such a big value (around £100k off the lottery jackpot or so)
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Snazzyzebra
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(Original post by anxiughty)
I wanted to know people's opinions on inheritance tax. Basically, the government (or at least the UK government) taxes you if your family's estate when they die is worth more than £325,000 when they die. Above that threshold, you get taxed 40%, may it be only a penny more or 100,000 more.

Do you think if your inheritance was that much it should be taxed? Why or why not?

(I'm just curious. Currently, I have no stance, hence I wanted to know)

I think it is the most unjustified form of tax, because as a human being you have the right to procreate and pass on what you've gained to your love ones so that may live better, be better and do better. It's a tax that hit's the working poor and working middle classes the hardest.

Hypothetically- imagine a state with like 80% inheritance tax- a poor man spends his whole life working his way out of poverty, and leaves just enough to give his grandchildren a deposit on their first house (his own children aren't as lucky- they've had to work just as hard). Then BAM! Back to square one.

Obviously it's not a problem for the rich because there comes a point where a tax as high as say 80% (or even 50%) doesn't affect them because they're already so wealthy in the first place, and have the legal and political knowledge (or financial means of acquiring it) to avoid such heavy taxes in the first place.
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999tigger
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Thats why you do tax planning and give most of it away beforehand.
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unigoer123
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I think ordinary people who have their whole lives to build something that resembles a house that they own, having that taken away from their children because it worth 500k is pretty appalling.

The threshold should be raised massively, to the millions of pounds and the percentage should be far lower. That way working-people don't get hit the hardest and deprived of the right to pass their property on.
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Tom Trybull
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(Original post by Snazzyzebra)
I think it is the most unjustified form of tax, because as a human being you have the right to procreate and pass on what you've gained to your love ones so that may live better, be better and do better. It's a tax that hit's the working poor and working middle classes the hardest.

Hypothetically- imagine a state with like 80% inheritance tax- a poor man spends his whole life working his way out of poverty, and leaves just enough to give his grandchildren a deposit on their first house (his own children aren't as lucky- they've had to work just as hard). Then BAM! Back to square one.

Obviously it's not a problem for the rich because there comes a point where a tax as high as say 80% (or even 50%) doesn't affect them because they're already so wealthy in the first place, and have the legal and political knowledge (or financial means of acquiring it) to avoid such heavy taxes in the first place.
I think it's the MOST justifiable form of taxation. The sole reason for inequality of opportunity is the inheritance of money, social/cultural capital, and education from your parents. What you inherit from your parents is clearly not a product of your own hard work. The more we can do to limit inequality of opportunity, the better.

I don't think you can make a libertarian argument that taxation and welfare reward laziness, punish hard work, and undermine meritocracy in the case of inheritance tax, as (as I said) it is not a product of your own hard work, but that of your parents.

Increase inheritance tax and spend the extra money on welfare for those who have nothing to inherit from their families.
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Pangol
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(Original post by anxiughty)
I wanted to know people's opinions on inheritance tax. Basically, the government (or at least the UK government) taxes you if your family's estate when they die is worth more than £325,000 when they die. Above that threshold, you get taxed 40%, may it be only a penny more or 100,000 more.
The 40% only applies to the value of the estate above the £325,000, so the last thing you say here seems a bit odd. The first £325,000 is interitance tax free, however much more you have to pay it on.

I think it's a perfectly reasonable tax. If we want the things that we want in this country, they have to be paid for somehow, and a tax like this will only affect estates of a fair value.
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Just my opinion
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(Original post by 999tigger)
Thats why you do tax planning and give most of it away beforehand.
Assuming you don't die suddenly of HA or an accident.
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Dheorl
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I think inheritance tax on everything apart from property is one of the best forms of tax. It's about the only tax that actively encourages movement of money. I think taxing inheritance of property is slightly more dubious, but anything in the way of monetary assets, stocks etc, sure, tax the hell out of it.

The other main forms of tax, income tax and VAT, both in effect penalise productivity and spending, neither of which is exactly great for the economy. However penalising what is essentially hoarding should be encouraged IMO. I mean sure, be sensible and keep a bit for a rainy day and pass that rainy day fund on, that's beneficial to everyone, but £325,000 is a tad excessive for a rainy day fund...
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Notoriety
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(Original post by 999tigger)
Thats why you do tax planning and give most of it away beforehand.
But that supposes that the person knows about managing taxes, are inclined to manage it, and have the resources to do so. £500,000 is really not that much and it doesn't require a great deal of sophistication to accrue such an amount.

For example, think about the number of people who do their own DIY tax avoidance schemes through personal service companies. Increasingly they're getting huge tax demands after an HMRC review. Who uses these schemes? Young sophisticated professionals trying to maximise their income and they cannot even do it. Compare that with an old 80-year-old couple who don't really remember how much is in all their accounts, they haven't had a recent estimation on the value of the property, and they are not all that inclined to manage it. How often you advise people of a senior age about X scheme and they tell you "No, it doesn't matter; I don't want to cause a fuss."
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999tigger
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(Original post by Just my opinion)
Assuming you don't die suddenly of HA or an accident.
Ofc but most people with large amounts know to do some tax planning. People with large sums are experts in preserving it hence the Trust.
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NonIndigenous
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Beyond a certain age, people's lives revolve increasingly around providing for and raising their offspring. It's what motivates them to get up in the morning, get further qualifications, and better paying jobs. It's what motivates them to stay productive and keep going. Many would sink into depression without it. Many in fact are, as has been observed to be the trend with our population growth decline.

If you take that away with inheritance taxes... you're potentially doing an awful lot of long-term damage, socially and economically.

Tax other things if you need to raise money. Literally almost anything else would be better. Besides, the super rich are impervious to these laws (which is the group most people like to target). It mostly affects the middle-classes, which are the breadbasket of all Western economies.
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Snazzyzebra
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(Original post by Tom Trybull)
I think it's the MOST justifiable form of taxation. The sole reason for inequality of opportunity is the inheritance of money, social/cultural capital, and education from your parents. What you inherit from your parents is clearly not a product of your own hard work. The more we can do to limit inequality of opportunity, the better.

I don't think you can make a libertarian argument that taxation and welfare reward laziness, punish hard work, and undermine meritocracy in the case of inheritance tax, as (as I said) it is not a product of your own hard work, but that of your parents.

Increase inheritance tax and spend the extra money on welfare for those who have nothing to inherit from their families.
Great so just keep crushing the poor. Well done. Don't give people something to hope for and look forward to- just strip them of their human dignity, all possessions and hope, pump them with handouts make them miserable and dependent so they own nothing. Then when the government changes and welfare is cut, destitution will hit them like the plague.

The whole point of hard work is to pass something on. I'm not saying welfare encourages laziness- the libertarian bla bla bla, keep it simple.

I'm saying if you can't pass on what you've earned to your kids whats the point in working at all? Above all, and as before, this problem doesn't affect the rich as they have already accumulated so much wealth high inheritance tax doesn't affect them. It affects the working poor who are trying to better themselves and give their family a better quality of life.
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anxiughty
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(Original post by Pangol)
The 40% only applies to the value of the estate above the £325,000, so the last thing you say here seems a bit odd. The first £325,000 is interitance tax free, however much more you have to pay it on.

I think it's a perfectly reasonable tax. If we want the things that we want in this country, they have to be paid for somehow, and a tax like this will only affect estates of a fair value.
ahaha sorry my statement must not have been clear then. i do know that you only get charged above the 350,000 threshold, which is what I said, but i guess my wording wasn't very clear with that.
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Dheorl
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(Original post by Snazzyzebra)
I'm saying if you can't pass on what you've earned to your kids whats the point in working at all?
So you have money to enjoy your life? There's millions of people in the world without children, a lot in quite highly paid jobs. I don't see them all quitting work because there's no point...
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username3748656
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No lol the Government can't even spend the people's money efficiently and effectively, who the hell does the Government think it is getting involved in my money after I die?

Majority of people who support inheritance tax are those that come from poor families, if they were to bump into a long-lost relative that's rich as f*ck and would give them the inheritance then watch them change their tone "BUT ACKTUALLY ITS MAH MONEY!".
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Dheorl
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(Original post by Sufyaan65)
No lol the Government can't even spend the people's money efficiently and effectively, who the hell does the Government think it is getting involved in my money after I die?

Majority of people who support inheritance tax are those that come from poor families, if they were to bump into a long-lost relative that's rich as f*ck and would give them the inheritance then watch them change their tone "BUT ACKTUALLY ITS MAH MONEY!".
I'd question why the rich old relative had been so moronic and not spent their money...
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username3748656
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(Original post by Dheorl)
I'd question why the rich old relative had been so moronic and not spent their money...
It's funny you say "moronic" as if the guy, you know who's rich and stacked, is a loser? There's only so much you could spend, especially in this scenario where the relative doesn't have children to spend it on (hence why you're getting the money in the first place).
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Dheorl
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(Original post by Sufyaan65)
It's funny you say "moronic" as if the guy, you know who's rich and stacked, is a loser? There's only so much you could spend, especially in this scenario where the relative doesn't have children to spend it on (hence why you're getting the money in the first place).
Not sure how you made the leap from moronic to loser, but w/e. To me anyone who can't manage to spend their money is simply lacking in imagination/world knowledge.
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chazwomaq
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I think your example is exactly backwards.

(Original post by Snazzyzebra)
Hypothetically- imagine a state with like 80% inheritance tax- a poor man spends his whole life working his way out of poverty, and leaves just enough to give his grandchildren a deposit on their first house (his own children aren't as lucky- they've had to work just as hard). Then BAM! Back to square one.
But with any realistic threshold this will not happen. The poor will be protected from the tax and the rich will pay.

Obviously it's not a problem for the rich because there comes a point where a tax as high as say 80% (or even 50%) doesn't affect them because they're already so wealthy in the first place
The richer they are the more they'll pay, like any tax.

Without inheritance tax offspring of rich parents will get a lot of unearned wealth, and offspring of poor parents will get very little. It's progressive.
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chazwomaq
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(Original post by unigoer123)
I think ordinary people who have their whole lives to build something that resembles a house that they own, having that taken away from their children because it worth 500k is pretty appalling.

The threshold should be raised massively, to the millions of pounds and the percentage should be far lower. That way working-people don't get hit the hardest and deprived of the right to pass their property on.
Tax is routinely applied when money changes hands (income tax, VAT etc.). Why should inheritance be any different?
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