Conservatives

[RobHawk]

I don't think it should be reviewed down the line. Broadly speaking you'd call me centre left but I believe fundamentally you should be entitled to pass money to your next of kin without penalty, assuming you've earned and managed that money legally and appropriately during your lifetime, which is one of the things I go the other way on.

 

But other than potentially saying it could be looked at in future when specifically asked about it, what fuss have Labour kicked up about it? Whether you agree with it or not is irrelevant, its a different matter to the current tax avoidance scandal and thats essentially what Corbyn said. I expected him to make more of a fuss about it, but his response was measured and he concentrated his attack purely on the issue of tax avoidance. 

[Rincewind]

Corbyn does not do 'personal' but Dennis Skinner does. He called Cameron Dodgy Dave and was thrown out of the commons for it. Pity he did not retract when the speaker asked because apparently Cameron got out of answering a question.

A silly thing to say though. Should keep his thoughts private. As should Cameron with his shirt and tie comment.

[DJ Barry Hammond]

Corbyn does not do 'personal' but Dennis Skinner does. He called Cameron Dodgy Dave and was thrown out of the commons for it. Pity he did not retract when the speaker asked because apparently Cameron got out of answering a question.

A silly thing to say though. Should keep his thoughts private. As should Cameron with his shirt and tie comment.

Complete opposite... What Skinner has done is provide a sound bite that's been played countless times since he did it - and the fact that Cameron didn't respond (I imagine he could have addressed the house specifically afterwards) means it just sits there, it exists.

It's actually a lot more effective than any answered question could be.

Edit: plus you assume Cameron would have actually answered the question being asked.

[Jon the Hat]

I don't think it should be reviewed down the line. Broadly speaking you'd call me centre left but I believe fundamentally you should be entitled to pass money to your next of kin without penalty, assuming you've earned and managed that money legally and appropriately during your lifetime, which is one of the things I go the other way on.

 

The fact that you cannot do this drives a large amount of tax planning which some would call morally wrong.  Take away the punitive inheritance tax and you take away the incentive.

[Bryn]

The fact that you cannot do this drives a large amount of tax planning which some would call morally wrong. Take away the punitive inheritance tax and you take away the incentive.

I think this is bollocks, the incentive is having more money and there is a culture of entitlement amongst some people that will drive them to avoid tax.

[Alf Bentley]

I don't think it should be reviewed down the line. Broadly speaking you'd call me centre left but I believe fundamentally you should be entitled to pass money to your next of kin without penalty, assuming you've earned and managed that money legally and appropriately during your lifetime, which is one of the things I go the other way on.

The fact that you cannot do this drives a large amount of tax planning which some would call morally wrong.  Take away the punitive inheritance tax and you take away the incentive.

 

 

Is Inheritance Tax "punitive"? It's certainly crude in the way it operates (40% flat rate above the exempt threshold), but you have to leave a lot of capital before you pay any tax. For an individual, the first £325,000 is tax-free - and that becomes £650,000 for a couple, if one partner leaves their full estate to the other - and that allowance is set to rise to £1 million by 2021, provided the estate includes the main residence. Maybe there could be 2-3 different Inheritance Tax bands, or regional variations based on average income, but then there's the risk of creating a load of expensive bureaucratic hassle for the state and for people recently bereaved.

 

There are clear anomalies. I recently read about 2 elderly sisters who had little cash but co-owned their house. Whichever of them survived longer was going to be obliged to sell their home to pay Inheritance Tax because, unlike married couples or civil partners, they couldn't leave their estate to one another tax-free when the first one died. That's completely wrong.

 

However, I struggle to see how anyone can feel hard done by if they have to pay tax after inheriting £325,000 to £1 million tax free. That's just massively greedy! 

 

Some people will always try to avoid any tax: working cash-in-hand to avoid income tax; buying smuggled fags to avoid excise/tobacco duty; buying goods on the black market to avoid VAT; investing offshore to avoid corporation tax or whatever. That just needs to be made as difficult as possible. Not slashing the number of staff at HMRC would be a good start.

 

Of course, people should be entitled to pass money on to next of kin, but I don't see some absolute moral right to do so tax-free. Where are the rights of younger generations from poor families in all that? They've done nothing wrong, yet the state is telling them: "your mate's Dad was a billionaire, so through no merit of his own he can inherit £1bn tax free, but your Dad was a pauper, so through no fault of yours, if you want any public services you'll have to pay for them through the money you earn". Inheritance Tax isn't a big earner for the Treasury, but if you got rid of it, you'd still have to either increase other taxes or cut public spending.

 

A much bigger injustice relates to the funding of care for the elderly. After winning so many of their votes, the Tories have really stitched the elderly and their families up. At the election, they promised to introduce a £72,000 cap on self-funded care costs. Once elected, they immediately postponed this until at least 2020 as they realised that they'd cut council funding too much for councils to be able to afford it. So, if you need full-time care for a few years when you're old, you can end up spending hundreds of thousands of quid and having to sell your home to pay care home fees, reducing your estate to £14,000, even if you'd earned great wealth through work/business. In contrast, if you have the "good fortune" to go quickly, you get to hand on your entire estate.

 

I have power of attorney for my elderly father and we're affected by both these situations. At present, Inheritance Tax might well be due on my Dad's estate, depending on the valuation of his flat. Not because my parents were high-achievers earning high incomes, but purely because they chanced to move to a house in London in the mid-80s, before house prices rocketed. Assuming I outlive him, I'll be executor of my Dad's will and if any Inheritance Tax is due, unlike the Camerons I intend to pay it - and will consider our family to have been very lucky to have inherited hundreds of thousands of quid tax-free when many people have and inherit very little.

 

The other side of the equation is that my Dad now needs care 24/7, so I arranged a permanent live-in carer. That costs my Dad more than £40,000 per year. I'm not complaining about that from my own family's perspective. If my Dad survives for a number of years (unlikely), we might reach the point where my Dad has no cash left and we have to sell his flat to fund care home fees (neither my brother nor I could afford such fees). But many people have a lot more to complain about. I think about my cousin who died recently after spending her last 8 years in a nursing home following a massive stroke. Despite poor health, she had worked all her life on lowish pay and owned her home, but would have had a lot less capital than my Dad. I assume her family had to use up her whole estate and then rely on council funding in her final years - or pay some of her fees themselves (and both her kids had children of their own to support). Many other people are even less fortunate, if their parents were skint and renting - unless they're seriously rich or able to look after their parents themselves (no easy task with dementia, Parkinson's or whatever), they'll have no option but to rely on cash-strapped councils to fund a place in one of the cheaper care homes, many of which are closing down and some of which have been exposed for their awful treatment of residents.

 

I know which I think is the higher priority between funding decent care for those who need it and allowing people to inherit £1 million tax-free because their parents happened to be rich.

And I know what I think about the morality of people fortunate enough to be rich who then move their wealth offshore to get even richer by avoiding tax that could fund decent care for the elderly.   

[Jon the Hat]

I think this is bollocks, the incentive is having more money and there is a culture of entitlement amongst some people that will drive them to avoid tax.

 

That is a very antagonistic position to take.  I assert that you will take a much more conservative position to inheritance tax (and income tax probably) as you get older and become a very well paid consultant surgeon.

[Rincewind]

I think this is bollocks, the incentive is having more money and there is a culture of entitlement amongst some people that will drive them to avoid tax.

Agree. So if they were given zero tax they are saying they would not fiddle and be crooks? 70 grand plus expenses not enough yet they expect a shop floor worker to exist on a fraction of that. Maybe they should live within their means like the majority of us.

[Strokes]

Is Inheritance Tax "punitive"? It's certainly crude in the way it operates (40% flat rate above the exempt threshold), but you have to leave a lot of capital before you pay any tax. For an individual, the first £325,000 is tax-free - and that becomes £650,000 for a couple, if one partner leaves their full estate to the other - and that allowance is set to rise to £1 million by 2021, provided the estate includes the main residence. Maybe there could be 2-3 different Inheritance Tax bands, or regional variations based on average income, but then there's the risk of creating a load of expensive bureaucratic hassle for the state and for people recently bereaved.

 

There are clear anomalies. I recently read about 2 elderly sisters who had little cash but co-owned their house. Whichever of them survived longer was going to be obliged to sell their home to pay Inheritance Tax because, unlike married couples or civil partners, they couldn't leave their estate to one another tax-free when the first one died. That's completely wrong.

 

However, I struggle to see how anyone can feel hard done by if they have to pay tax after inheriting £325,000 to £1 million tax free. That's just massively greedy! 

 

Some people will always try to avoid any tax: working cash-in-hand to avoid income tax; buying smuggled fags to avoid excise/tobacco duty; buying goods on the black market to avoid VAT; investing offshore to avoid corporation tax or whatever. That just needs to be made as difficult as possible. Not slashing the number of staff at HMRC would be a good start.

 

Of course, people should be entitled to pass money on to next of kin, but I don't see some absolute moral right to do so tax-free. Where are the rights of younger generations from poor families in all that? They've done nothing wrong, yet the state is telling them: "your mate's Dad was a billionaire, so through no merit of his own he can inherit £1bn tax free, but your Dad was a pauper, so through no fault of yours, if you want any public services you'll have to pay for them through the money you earn". Inheritance Tax isn't a big earner for the Treasury, but if you got rid of it, you'd still have to either increase other taxes or cut public spending.

 

A much bigger injustice relates to the funding of care for the elderly. After winning so many of their votes, the Tories have really stitched the elderly and their families up. At the election, they promised to introduce a £72,000 cap on self-funded care costs. Once elected, they immediately postponed this until at least 2020 as they realised that they'd cut council funding too much for councils to be able to afford it. So, if you need full-time care for a few years when you're old, you can end up spending hundreds of thousands of quid and having to sell your home to pay care home fees, reducing your estate to £14,000, even if you'd earned great wealth through work/business. In contrast, if you have the "good fortune" to go quickly, you get to hand on your entire estate.

 

I have power of attorney for my elderly father and we're affected by both these situations. At present, Inheritance Tax might well be due on my Dad's estate, depending on the valuation of his flat. Not because my parents were high-achievers earning high incomes, but purely because they chanced to move to a house in London in the mid-80s, before house prices rocketed. Assuming I outlive him, I'll be executor of my Dad's will and if any Inheritance Tax is due, unlike the Camerons I intend to pay it - and will consider our family to have been very lucky to have inherited hundreds of thousands of quid tax-free when many people have and inherit very little.

 

The other side of the equation is that my Dad now needs care 24/7, so I arranged a permanent live-in carer. That costs my Dad more than £40,000 per year. I'm not complaining about that from my own family's perspective. If my Dad survives for a number of years (unlikely), we might reach the point where my Dad has no cash left and we have to sell his flat to fund care home fees (neither my brother nor I could afford such fees). But many people have a lot more to complain about. I think about my cousin who died recently after spending her last 8 years in a nursing home following a massive stroke. Despite poor health, she had worked all her life on lowish pay and owned her home, but would have had a lot less capital than my Dad. I assume her family had to use up her whole estate and then rely on council funding in her final years - or pay some of her fees themselves (and both her kids had children of their own to support). Many other people are even less fortunate, if their parents were skint and renting - unless they're seriously rich or able to look after their parents themselves (no easy task with dementia, Parkinson's or whatever), they'll have no option but to rely on cash-strapped councils to fund a place in one of the cheaper care homes, many of which are closing down and some of which have been exposed for their awful treatment of residents.

 

I know which I think is the higher priority between funding decent care for those who need it and allowing people to inherit £1 million tax-free because their parents happened to be rich.

And I know what I think about the morality of people fortunate enough to be rich who then move their wealth offshore to get even richer by avoiding tax that could fund decent care for the elderly.   

Actually I totally agree with you on the care for the elderly part, my grandma recently suffered a stroke and we are fighting to get decent care for her as she is passed from department to department. It's so traumatic and the care levels just don't seem to exist, we have speech and language therapists and physiotherapist turning up to the house when she is in the LRI, then they don't turn up when they say they will when she is at home. Infection after infection, such a tragic way to be treated, I could go on for hours but it breaks my heart.

[Rincewind]

My stepdad was in a private home for a couple of years before he died earlier this year. It was partly paid for by my brother. I suspect the sale of the house my mum stepdad had paid part of it as she moved in with my sister. I forget how much it was but the fees were expensive but better for my mum because it was so demanding looking after him.

I do not I will inherit much. I was given a lump sum when I was out of work which I was told was from my mum's will. Not a massive amount but it helped. My brother has said that he is living off his hotel business sale, poker profit and house sale atm and it is a toss up which runs out first his bank balance or him. If BB then he will just have OAP pension which as far as I know he has not claimed yet or does not qualify because of his BB.

[Alf Bentley]

Actually I totally agree with you on the care for the elderly part, my grandma recently suffered a stroke and we are fighting to get decent care for her as she is passed from department to department. It's so traumatic and the care levels just don't seem to exist, we have speech and language therapists and physiotherapist turning up to the house when she is in the LRI, then they don't turn up when they say they will when she is at home. Infection after infection, such a tragic way to be treated, I could go on for hours but it breaks my heart.

 

 

I can absolutely relate to this and could tell you a dozen such stories. One example: because of his Parkinson's, my Dad is vulnerable to falls. Even though he now has a live-in carer, he sometimes gets up on his own with disturbing dreams or needing the toilet - and has already ended up in A&E twice due to falls. We suggested fitting a bar onto the bed so that he'd have to call the carer, but they refused because of the risk that he might try and climb over it. Instead, after several weeks and referrals between 3 institutions, he was assessed and they promised an alarm that would alert the carer if he got out of bed. They delivered it, but it has a 1-minute delay before the alarm goes off - better than nothing, but still ample time for him to have a fall and end up in hospital..and they're trying to avoid unnecessary bed-blocking by the elderly?!? 

 

Social care is an absolute mess, I'm afraid. Some of this is due to cuts in local government funding, particularly by this government but also by previous governments. Local government is an easy target for any central government. If social services are crap, most voters will blame social services or the council, not inadequate central govt. funding. Being cynical, it makes more sense for govts (red and blue) to spend in areas they're identified with, rather than local govt.

 

Some of it is just due to over-complex systems, institutions that duplicate one another's work and a lack of integration between health (central govt) and social care (local govt). At one point last year, I was liaising with 15 different health/care providers about my Dad (I counted). I can do that because I work from home, but lots of families can't. He has a designated social worker but she hasn't been in touch for 8 months, since my last answerphone message. My Dad has some cash so is self-funding, so that suits me fine (she was worse than useless when she was in touch)....but again, lots of families don't have the cash to do that, so are dependent on a social care system that is barely operational....unless you send your loved one to a care home and can get a place (and I've read that the average time that someone survives in a care home is about 18 months).

 

Good luck with your Grandma's care. I can relate to your experience with appointment cock-ups, too. We joke that the district nurses don't turn up when we've asked for a visit, but DO turn up when we don't need them. Likewise, my Dad saw physios and speech therapists last year. They tried their best, but eventually stopped coming as it was serving no purpose....now a different crew, the "locality team", have sent different physios and speech therapists to see him, performing the same role as the people last year - but this team has "a mission to avoid A&E admissions".....and yet they can't provide a method for stopping my Dad getting out of bed, with the risk of a fall that could be fatal given his age and condition. It's a real horror show, I'm afraid.

 

At the election, Miliband advocated integration between the NHS and council social care - and to be fair to the Tories, they picked the idea up and said they'd implement it. Let's hope they do. A lot more disruption, but it must happen. With an aging population and cash-strapped councils, we're heading for a glut of misery and unnecessary deaths of elderly people - and a lot more blocking of scarce A&E beds by people who could have been safely at home if they'd been offered proper care.

 

Sorry to have ranted on yet again....

[Guest MattP]

Wasn't sure where to put this but Liz Kendall was again tremendous on ThisWeek last night.

The Tories should thank their lucky stars she wasn't elected leader, female, attractive, likeable, centrist, pleasure to listen to.

We'd be looking at a probable Labour government had they done so.

[DJ Barry Hammond]

Just decided to look in on Twitter to see who the 'Totty gate' MP was... and on discovering I can agree with the journalist, it was most likely to have been said in a derogatitive fashion.

What I'm astounded at however is the number of women that have come out against the stance taken by the journalist. This isn't a case of political correctness gone mad, it's a case of trying to correct untoward behaviour and was handled very well by the person in question - until others interviewed and ended up making a bigger fuss of it.

[Guest MattP]

It was Colonel Bob wasn't it?

[Guest Sharpe's Fox]

Good article here about the history and flaws of neoliberism

 

http://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

[Bellend Sebastian]

Good article here about the history and flaws of neoliberism

 

http://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

 

I was going to post that!  I do like a bit of Monbiot.

 

I'd be very interested to hear people's views on it - its viability as a philosophy, movement, whatever you want to call it, I think transcends party politics in so far as in the last 30 years or so it's what all the parties have bought into to a large extent - whoever you vote for, this is what you get, most of the time

[Webbo]

Good article here about the history and flaws of neoliberism

 

http://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

Neo liberalism is just a meaningless phrase invented by the left to pretend that capitalism, which is a natural process that happens when you leave people alone, is some carefully planned right wing plot.

 

Even in the article he concedes that what came before the 80s had failed . Whether you like it or not living standards today are vastly superior to what they were in the good old days of the 70s. 

[DJ Barry Hammond]

Very interesting... may need to do some more independent reading on that subject

[Thracian]

I think this is bollocks, the incentive is having more money and there is a culture of entitlement amongst some people that will drive them to avoid tax.

 

 Burglars seem to think like that but they don't attract a special tax.

 

As for inheritance tax, it's just an excuse for robbery to me - and no more defensible than burglary.

 

 

This guy puts it well enough: 

 

Gregory Ball, York Law School Undergraduate, Legal Blog Author

 

 

It totally depends on how you define fair. Google defines 'fair' as: "treating people equally without favouritism or discrimination." How does the inheritance tax relate to this?

From this it appears that there are three criteria: fair, without favouritism, without discrimination. Let's look at those three criteria in relation to the inheritance tax.

To treat everyone equally in a situation where some are benefitting from being an heir and some are not at that stage yet would be unreasonable--the two people are at different points in life. Thus we must look at a different way to apply the concept of equality, and this leads us to treating all people who are heirs the same. Person A has an inheritance, and person B has an inheritance, if we are to apply the concept of equality we will treat both person A and person B in exactly the same way, regardless of how large or small the inheritance is.

This is not how the inheritance tax works. People who have an inheritance of over £325,000 are subject to the tax, whereas those who do not a free from it. As such, it fails the first aspect of fairness.

To not show favouritism is to not unjustifiably give someone special, positive treatment, for a characteristic about themselves. To clarify, if someone performs well at something it would not be showing favouritism to give them a reward as it would be justified. However, to give someone a reward simply because you like them would be to show favouritism.

It could be argued that by allowing people who do not have an inheritance of over £325,000 to not pay a tax on it is favouritism, though the justifiability of such an action is a debate for another time.

If we are to treat people without discrimination, that means that we ought not take one specific characteristic about a person, and punish them for that. Let's specialise that sentence a little for the topic: we ought not take the fact that someone has died and someone is their heir, and punish them for being that. So, we could argue that the inheritance tax is not fair, as it discriminates against heirs for being heirs.

In summation, if you take the Google definition of fairness, the inheritance tax does not fulfill the requirements, and so may not be fair.

    

 

---------------------------------

 

I would add that:

 

 

The inherited money has already been taxed once so it is unfair to tax it again. It's discriminatory. Because one individual might chose to deny himself in favour of providing for his family doesn't mean he should effectively be punished for electing to let his inheritors use his money instead of himself - their spending will doubtless attract indirect taxation just as it would it would have done if spent by the accumulator.

 

And just because one person makes the free choice to provide for his family while another person might not, doesn't mean the former should be effectively punished for the decision when he's already paid his dues.

 

As for IT providing for the poor, the sick etc, as mentioned, the saver's taxes would already have paid his share of providing justifiable government taxation - perhaps for helping the poor but perhaps instead for giving unwanted or unneeded aid to India, to pay for EU propaganda or to line the pockets of spoilt politicians etc, but who is to say the inheritors wouldn't spend their windfall for a greater good than any government, because I know plenty of people who would and do.

[Bryn]

I'd have voted for Liz Kendall. The smart party would have had Corbyn around for his decency and humanity, but would have had a more moderate leader at the helm.

Just to clarify cause I'm not sure it came across; I'm against inheritance tax, certainly into the low 6 figures anyway. I'm against the inert hoarding of money, for example offshore, and I'm for significant taxation of those who earn well above the national average as I feel that, much as we complain, you get a good amount for your money. But once it's earned, you should be entitled to pass it to your family.

[MC Prussian]

On the subject of inheritance tax, I think it's a good idea on paper if done correctly. I wonder if a progressive tax (those who have more money to pass onto the next generation pay more) or a tax that distinguishes between money passed on to people and inheritance money used to invest in companies, with percentages adjusted accordingly, could do the job.

 

The major point here is that the ones who can pass on wealth onto the next generation within the family are in general already pretty well off and passing on money that they already have inherited themselves (without having worked for it or contributed to ), so this tax would only affect a selected group of people who have been able to accumulate wealth thanks to the family for decades, if not centuries.

 

And we don't even need to talk high percentages of tax, either. The percentage itself could be placed in the lower single-digit range - still amassing enough money for the state to invest in infrastructure, education, healthcare, etc.

 

All in all, I can however envisage the rich and famous making sure the pay as little money as possible or declare as little wealth as possible should such tax be implemented in the near future, channelling their wealth past the authorities, investing in some dodgy offshore company in Panama, Delaware or the Bahamas, for instance. Not that they aren't cheating right now or have been doing that for years now, anyway.

[DJ Barry Hammond]

Thracian - if you wanted a fair to all inheritance tax rule, the easiest one to place is that no inheritance is allowed at all, any remaining estate goes to the government.

[DJ Barry Hammond]

Furthermore Thracian, to complain that Inheritance Tax isn't 'fair' misses the point - I don't think it was ever designed to be fair, it was designed as a way to redistribute life chances, a way of funding forward progression, giving the state the ability to widen the effect of ones inheritance of a certain amount to more than the immediate chosen few.

With IHT as it stands, the limits are reasonably broad especially as now a first home isn't included in the calculation and through creative accounting people affected can minimise the risk and still pass on funds to their children / charities as they see fit whilst they're alive - so I'm astounded this is suddenly an issue given the numbers it will effect.

It should also be noted that one of the other reasons for inheritance tax is to encourage people to use their wealth, not scurry it away. If inheritance tax didn't exist you could potentially have a situation where someone's wealth is so vast it could pass on through generation through generation without being touched, taking a huge amount out of the countries economy.

Finally - IF... IF... You do take away inheritance tax, what you may find is any inheritance received would then be treated as income for the person receiving it - which would actually tax at a higher proportion the IHT does, so be careful what you wish for.

[DJ Barry Hammond]

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

https://www.gov.uk/inheritance-tax/overview

Useful links

[Webbo]

Tax should only be used to raise money for govt expenditure. It shouldn't be used to make people poorer.