7 ms·

Silly is actually too nice a word for such extortion scheme. As you see if rich enough/business big enough, it could be easily circumvented. The little people w

by jajko 2y ago

Silly is actually too nice a word for such extortion scheme. As you see if rich enough/business big enough, it could be easily circumvented. The little people without access to great lawyers and accountants got absolutely hammered when it got applied to them. But victorian England wasn't setup for little people in mind, it was all lords and wealthy businessmen ruling it all. So similar to current situation in many places - if you are rich enough, you basically exist outside of tax system, be it capital gains, investments, inheritance etc. Obscure tax structures spanning whole globe as ie Panama papers showed. Its the middle class that gets hammered out of existence, ie in France its around 40% for inheritance tax, and trusts are AFAIK forbidden / treated very punitively. Very rich still bypass this and everybody knows this, everybody below not so much. Its not even effective there, the amount extracted yearly in such way is minuscule, but it pleases crowds with 'social justice' so they don't protest so much and burn more cars on streets.

InsideOutSanta 2y ago
Most jurisdictions have a tax-free allowance or threshold. If you're affected by an inheritance tax, you're not poor. As I said in the comment you're responding to, this seems like an example of how this type of tax worked correctly for a very rich person, so the thread you're responding to is already a counterexample to your argument. I agree that inheritance taxes can be implemented poorly. Still, the concept of an inheritance tax is good, and poorly implemented inheritance taxes should be fixed by improving them, not removing them.
- hgomersall 2y ago
  Recently proposed changes to the UK system to include business property (and farms) are going to further the take over of productive property (including farms) in the UK by private equity and large and multi-national companies who have shown to be pretty poor actors in furthering the public good. In my opinion, this is a particularly bad change to inheritance tax.
  - davedx 2y ago
    Insightful comment. Good example of the law of unintended consequences there.
  - helsinkiandrew 2y ago
    I don't think this has been fully enacted yet - but is being done because it had increasingly become a way to avoid tax - ie. buy dormant/hobby farmland and pass it on to your children tax free https://www.gov.uk/government/news/what-are-the-changes-to-agricultural-property-relief https://www.gov.uk/government/news/what-are-the-changes-to-a...
  - philjohn 2y ago
    Except the farming changes is far more nuanced than that. The reason farms are worth so much at present, despite low margins, is because of the inheritance tax loophole that was introduced in the 80's, at the behest of the landed backers of the Conservative Party. This turned farmland into a prime investment vehicle as a way to shelter assets from inheritance tax. Is the proposed change (and thresholds, plus half rate with interest free payments spread over 10 years) perfect? No - it'll still catch some small family farms - but it's telling that the highest level of opposition has come from some very wealthy landowners, such as those using their "farmland" for grouse hunting, rather than making food. The tax break in the 80's was a textbook market distortion, if we believe in the power of free markets, the value of the farmland will now fall, which means fewer family farmers will need to pay inheritance tax.
    - hgomersall 2y ago
      Totally agree this is a problem, but I'm very much minded to think that a proper farming policy would include such distortions in the planning. The current government seem to think that putting the boot into farmers at every opportunity is just fine (classically, they are very conservative), the latest being the sudden ending of SFI. Let's sit down and have a grown up conversation about it all, including food security, sustainability and the best ownership models, rather than pissing around with inheritance tax. In truth, my concerns are primarily around business property relief, since I think it is there that the damage will be both more significant and less visible. Many businesses carefully built up over years will have no option but to sell off a chunk to private equity to pay the tax liability. Is it a surprise that the gov come up with such policies when Rachel Reeves thinks that the finance industry is going to fire up growth [1], when they are the rent seeking parasites that are suppressing it. The fox has been invited into the hen house and getting to dictate policy. [1] https://www.gov.uk/government/news/chancellor-backs-britains-financial-services-to-drive-development-and-kickstart-economic-growth https://www.gov.uk/government/news/chancellor-backs-britains...
vbarrielle 2y ago
In France the inheritance tax is only applied above 100 000€, so it's really not 40% flat. What's more, it's possible to make donations before the death, 100 000€ every 15 years, without taxes, meaning most of the time no taxes are payed at all below 200 000€ or even 300 000€. These amounts are per-child, which means you can double them up if there are two children. Median patrimony in France is 175 000€ per household, so your typical middle class family with two children ends up paying no inheritance tax, without having done donations in advance.
- zxspectrum1982 2y ago
  For starters, 100.000 EUR is nothing. Also, in many jurisdictions that threshold only applies to direct (eg father-son) inheritance but not eg between siblings. I have an unmarried aunt with no kids. Most of her estate is land (that has passed through centuries in the family and is almost illiquid because the European Union has killed agriculture) and some stock (that cannot be used to pay the taxes because it's not yours until you pay the taxes). I just checked and when she dies, my mom (her only sister) will have to pay 45% of that in death tax. We may need to turn down the estate when she dies because we cannot pay the tax. And you think that's fair? Grow up.
  - pluies 2y ago
    The whole point of inheritance tax is to redistribute some of the accumulated family wealth across society. You think that's unfair? Grow up.
    - gambiting 2y ago
      I think it's unfair, you work your entire life paying tax on every single euro you make(a lot of tax in fact!) and then when you want to leave that to your child it's taxed again? What complete nonsense. I'm very glad the country where I'm from(Poland) doesn't have that.
      - InsideOutSanta 2y ago
pjc50 2y ago
The death tax more or less ended the UK aristocracy, apart from the absolute top echeolon of the very richest and the special case of the Royal family. e.g. https://en.wikipedia.org/wiki/Andrew_Cavendish,_11th_Duke_of_Devonshire https://en.wikipedia.org/wiki/Andrew_Cavendish,_11th_Duke_of... "Devonshire inherited the estate but also an inheritance tax bill of £7 million (£303 million in 2023), nearly 80 per cent of the value of the estate. To meet this, the Duke had to sell off many art objects and antiques, including several Rembrandts, Van Dycks and Raffaello Santis, as well as thousands of acres of land"
- desas 2y ago
  For perspective, the family - currently headed by the 12th duke, were estimated to be worth £910 million in 2024. They are not out of the top echelon, and are now structured much better for avoiding inheritance tax, which is also at a lower rate now.
bmacho 2y ago
> Silly is actually too nice a word for such extortion scheme. As you see if rich enough/business big enough, it could be easily circumvented. Maybe it could have been easily circumvented, but it wasn't circumvented in this case. It obstructed direct inheritance, thus, worked as intended for the rich.
helsinkiandrew 2y ago
> The little people without access to great lawyers and accountants got absolutely hammered when it got applied to them. In the tax year 2021 to 2022, 4.39% of UK deaths resulted in an Inheritance Tax Inheritance tax only kicks in above £325K of assets. If inheriting your parents home the threshold increases to £500K (and increases again to £1M if both parents die). That's hardly hammering the little people. https://www.gov.uk/inheritance-tax https://www.gov.uk/inheritance-tax https://www.gov.uk/government/statistics/inheritance-tax-liabilities-statistics/inheritance-tax-liabilities-statistics-commentary https://www.gov.uk/government/statistics/inheritance-tax-lia...
- Ntrails 2y ago
  > That's hardly hammering the little people. Agree. It hits the (upper) middle, as with most of the tax code afaict. I rarely resent paying tax until I see how little people earning multiples of me get away with paying.
- flir 2y ago
  There are always unintended consequences. (This isn't an argument for not having an inheritance tax, it's an argument for being clear-eyed about the trade offs). In the case of inheritance tax, it has resulted in a lot of British cultural treasures being shipped to the US to be auctioned.

by jajko 2y ago

InsideOutSanta 2y ago

Most jurisdictions have a tax-free allowance or threshold. If you're affected by an inheritance tax, you're not poor. As I said in the comment you're responding to, this seems like an example of how this type of tax worked correctly for a very rich person, so the thread you're responding to is already a counterexample to your argument. I agree that inheritance taxes can be implemented poorly. Still, the concept of an inheritance tax is good, and poorly implemented inheritance taxes should be fixed by improving them, not removing them.

hgomersall 2y ago
Recently proposed changes to the UK system to include business property (and farms) are going to further the take over of productive property (including farms) in the UK by private equity and large and multi-national companies who have shown to be pretty poor actors in furthering the public good. In my opinion, this is a particularly bad change to inheritance tax.
- davedx 2y ago
  Insightful comment. Good example of the law of unintended consequences there.
- helsinkiandrew 2y ago
  I don't think this has been fully enacted yet - but is being done because it had increasingly become a way to avoid tax - ie. buy dormant/hobby farmland and pass it on to your children tax free https://www.gov.uk/government/news/what-are-the-changes-to-agricultural-property-relief https://www.gov.uk/government/news/what-are-the-changes-to-a...
- philjohn 2y ago
  Except the farming changes is far more nuanced than that. The reason farms are worth so much at present, despite low margins, is because of the inheritance tax loophole that was introduced in the 80's, at the behest of the landed backers of the Conservative Party. This turned farmland into a prime investment vehicle as a way to shelter assets from inheritance tax. Is the proposed change (and thresholds, plus half rate with interest free payments spread over 10 years) perfect? No - it'll still catch some small family farms - but it's telling that the highest level of opposition has come from some very wealthy landowners, such as those using their "farmland" for grouse hunting, rather than making food. The tax break in the 80's was a textbook market distortion, if we believe in the power of free markets, the value of the farmland will now fall, which means fewer family farmers will need to pay inheritance tax.
  - hgomersall 2y ago
    Totally agree this is a problem, but I'm very much minded to think that a proper farming policy would include such distortions in the planning. The current government seem to think that putting the boot into farmers at every opportunity is just fine (classically, they are very conservative), the latest being the sudden ending of SFI. Let's sit down and have a grown up conversation about it all, including food security, sustainability and the best ownership models, rather than pissing around with inheritance tax. In truth, my concerns are primarily around business property relief, since I think it is there that the damage will be both more significant and less visible. Many businesses carefully built up over years will have no option but to sell off a chunk to private equity to pay the tax liability. Is it a surprise that the gov come up with such policies when Rachel Reeves thinks that the finance industry is going to fire up growth [1], when they are the rent seeking parasites that are suppressing it. The fox has been invited into the hen house and getting to dictate policy. [1] https://www.gov.uk/government/news/chancellor-backs-britains-financial-services-to-drive-development-and-kickstart-economic-growth https://www.gov.uk/government/news/chancellor-backs-britains...

vbarrielle 2y ago

In France the inheritance tax is only applied above 100 000€, so it's really not 40% flat. What's more, it's possible to make donations before the death, 100 000€ every 15 years, without taxes, meaning most of the time no taxes are payed at all below 200 000€ or even 300 000€. These amounts are per-child, which means you can double them up if there are two children. Median patrimony in France is 175 000€ per household, so your typical middle class family with two children ends up paying no inheritance tax, without having done donations in advance.

zxspectrum1982 2y ago
For starters, 100.000 EUR is nothing. Also, in many jurisdictions that threshold only applies to direct (eg father-son) inheritance but not eg between siblings. I have an unmarried aunt with no kids. Most of her estate is land (that has passed through centuries in the family and is almost illiquid because the European Union has killed agriculture) and some stock (that cannot be used to pay the taxes because it's not yours until you pay the taxes). I just checked and when she dies, my mom (her only sister) will have to pay 45% of that in death tax. We may need to turn down the estate when she dies because we cannot pay the tax. And you think that's fair? Grow up.
- pluies 2y ago
  The whole point of inheritance tax is to redistribute some of the accumulated family wealth across society. You think that's unfair? Grow up.
  - gambiting 2y ago
    I think it's unfair, you work your entire life paying tax on every single euro you make(a lot of tax in fact!) and then when you want to leave that to your child it's taxed again? What complete nonsense. I'm very glad the country where I'm from(Poland) doesn't have that.
    - InsideOutSanta 2y ago

pjc50 2y ago

The death tax more or less ended the UK aristocracy, apart from the absolute top echeolon of the very richest and the special case of the Royal family. e.g. https://en.wikipedia.org/wiki/Andrew_Cavendish,_11th_Duke_of_Devonshire https://en.wikipedia.org/wiki/Andrew_Cavendish,_11th_Duke_of... "Devonshire inherited the estate but also an inheritance tax bill of £7 million (£303 million in 2023), nearly 80 per cent of the value of the estate. To meet this, the Duke had to sell off many art objects and antiques, including several Rembrandts, Van Dycks and Raffaello Santis, as well as thousands of acres of land"

desas 2y ago
For perspective, the family - currently headed by the 12th duke, were estimated to be worth £910 million in 2024. They are not out of the top echelon, and are now structured much better for avoiding inheritance tax, which is also at a lower rate now.

bmacho 2y ago

> Silly is actually too nice a word for such extortion scheme. As you see if rich enough/business big enough, it could be easily circumvented. Maybe it could have been easily circumvented, but it wasn't circumvented in this case. It obstructed direct inheritance, thus, worked as intended for the rich.

helsinkiandrew 2y ago

> The little people without access to great lawyers and accountants got absolutely hammered when it got applied to them. In the tax year 2021 to 2022, 4.39% of UK deaths resulted in an Inheritance Tax Inheritance tax only kicks in above £325K of assets. If inheriting your parents home the threshold increases to £500K (and increases again to £1M if both parents die). That's hardly hammering the little people. https://www.gov.uk/inheritance-tax https://www.gov.uk/inheritance-tax https://www.gov.uk/government/statistics/inheritance-tax-liabilities-statistics/inheritance-tax-liabilities-statistics-commentary https://www.gov.uk/government/statistics/inheritance-tax-lia...

Ntrails 2y ago
> That's hardly hammering the little people. Agree. It hits the (upper) middle, as with most of the tax code afaict. I rarely resent paying tax until I see how little people earning multiples of me get away with paying.
flir 2y ago
There are always unintended consequences. (This isn't an argument for not having an inheritance tax, it's an argument for being clear-eyed about the trade offs). In the case of inheritance tax, it has resulted in a lot of British cultural treasures being shipped to the US to be auctioned.