the big inheritance tax time bomb...
So, according to Scottish Widows four in ten families will now have to pay inheritance tax because the threshold (currently £285,000) is far too low. OK, the threshold is going up to £325,000 in a couple of years time but even that is nowhere near high enough to stop families with very ordinary properties having to pay 40% tax on anything over that amount. Last year, only a third of householders were liable for death duties, but more and more families are being affected as house prices go up.
Thing about tax is that it has to be paid somehow - we have to get the money in for health, education, infrastructure etc (together with all the unbelievably wasteful projects this government has come up with) - the question is what is the fairest way to do it. The point of inheritance tax (IHT) was that it only taxed the rich who were inheriting large piles in the country. Now, though, it's taxing all kinds of people. Even if you have a two-bed semi in Croydon you're likely to be over the threshold.
Not only does Britain have, proportionately one of the highest levels of inheritance tax, compared to most industrialized countries, but it is fast being left in the cold by te number of developed nations that are abandoning any sort of inheritance or estate tax. In the United States, Bush (who is not only seriously rich himself but has a lot of very rich friends) is wiping out federal inheritance tax by 2010, following the lead shown by Canada which scrapped it more than 30 years ago.
Even Sweden, incredibly, abolished IHT last year, arguing that it will mean family businesses stay in family hands and the young are not punished. Also Cyprus, Italy and Estonia of all places have scrapped the tax. Portugal have done away with it in cases where the beneficiary is a close relative. France operates an inheritance tax rate up to a maximum of 40% over a threshold of £1.5million, while in Germany it's 30% over a threshold of £2 million.
I don't think that IHT should be completely abolished here - well, rather I just don't think it will happen under this Government. But I think it must be hiked way up to say, £800,000 - or even make it a round £1 million - so that only the genuinely rich would be hit. Something has to be done before too many people lose the homes they grew up in just because they can't afford to pay tax on their deceased parents' estates.
So, according to Scottish Widows four in ten families will now have to pay inheritance tax because the threshold (currently £285,000) is far too low. OK, the threshold is going up to £325,000 in a couple of years time but even that is nowhere near high enough to stop families with very ordinary properties having to pay 40% tax on anything over that amount. Last year, only a third of householders were liable for death duties, but more and more families are being affected as house prices go up.
Thing about tax is that it has to be paid somehow - we have to get the money in for health, education, infrastructure etc (together with all the unbelievably wasteful projects this government has come up with) - the question is what is the fairest way to do it. The point of inheritance tax (IHT) was that it only taxed the rich who were inheriting large piles in the country. Now, though, it's taxing all kinds of people. Even if you have a two-bed semi in Croydon you're likely to be over the threshold.
Not only does Britain have, proportionately one of the highest levels of inheritance tax, compared to most industrialized countries, but it is fast being left in the cold by te number of developed nations that are abandoning any sort of inheritance or estate tax. In the United States, Bush (who is not only seriously rich himself but has a lot of very rich friends) is wiping out federal inheritance tax by 2010, following the lead shown by Canada which scrapped it more than 30 years ago.
Even Sweden, incredibly, abolished IHT last year, arguing that it will mean family businesses stay in family hands and the young are not punished. Also Cyprus, Italy and Estonia of all places have scrapped the tax. Portugal have done away with it in cases where the beneficiary is a close relative. France operates an inheritance tax rate up to a maximum of 40% over a threshold of £1.5million, while in Germany it's 30% over a threshold of £2 million.
I don't think that IHT should be completely abolished here - well, rather I just don't think it will happen under this Government. But I think it must be hiked way up to say, £800,000 - or even make it a round £1 million - so that only the genuinely rich would be hit. Something has to be done before too many people lose the homes they grew up in just because they can't afford to pay tax on their deceased parents' estates.
posted by Jasmine Birtles @ 7:04 AM
0 Comments:
Post a Comment
<< Home