A global archive of independent reviews of everything happening from the beginning of the millennium
Read our Copyright Notice click here
For publication dates click here
A replacement?
Only 4% of estates pay inheritance tax and, generally, not the richest people. The marginal rate is 40%.
A tax at 7% on all cumulative lifetime gift receipts above a million would raise as much, three years after introduction.
Moral and practical arguments also line up better in favour of a gift receipts tax over inheritance tax.
If you have made money, or even inherited it, it is yours and you should not be penalized for doing what you want with it. If you are the recipient, you did not choose to be given the gift, though you are usually unlikely to refuse it, and so the better candidate to be taxed.
At present, if you leave your niece her bequest as a woodland, no tax is payable but if you leave her your home, which arguably she might need more, tax would probably be payable.
Such exemptions could be scaled back bringing down the marginal rate.
INHERITANCE TAX
Reviewed by ANDRE BEAUMONT
What is the most unpopular tax on the doorstep?
Inheritance tax.
The tax change granted by the former chancellor permitting happily married couples to leave nearly a million pounds to children or grandchildren if comprised of the family home impresses few.
Few fall into that subset of the population.
They would rather half a million allowance to everyone.
The electoral promise in 2010 was one million per person and it has not been kept just like a Liberal Democrat promise in 2008 to abolish tuition fees.
People who might leave the lower sum are not willing to be 'othered' by Labour, either, as part of the top 5%.
For every person who might leave that sum there are, in so many families, nine others who look to that person for some kind of financial leadership.
Two or three may be directly dependent and some of the others are proud that there is someone in their family that has a little useful money.
When media talks of 60% home ownership, or a similar figure, it does not mean 60% of the population are owner-occupiers but that they live in households where one or more persons is an owner.
People these days simply cannot set up a car body workshop or joinery business without family help or own resources. A bank would laugh you out of the door, if there were one in a village.
Society has a choice.
Either it lets the larger corporates and government pre-empt more and more resources to themselves or it can leave more with the household sector.
It can start on the latter by cutting out high inheritance tax. Otherwise, as the older generation die, all the capital will progressively migrate to the government, the larger corporates and those who own the larger corporates.
For most, homes are just homes.
Nonetheless, all the homes sold will eventually tend to pass to buyers of last resort: the over-mortgaged, overseas owners, buy-to-let purchasers and vulture rental investment funds.