‘Political suicide’ inheritance tax gains growing support - SUPPOSEDLY

I'd have to be dumb, deaf, blind, on end stage dementia with total quadriplegia before I let any government decide which of my family is or isn't deserving of MY assets.

 

The devil is in the detail - it would need to be CPI adjusted etc. I really would prefer for my estate to be taxed and for the highest income tax rate be reduced. Even when I think about my parents estate, unless life throws me a huge curve ball I don’t have any need for that. I would have preferred to have more money in my pocket when I was younger and starting out - and paying a marginal tax rate of 49%….

 

Yep! Pretty much!

 

In UK inheritance tax is only paid on <10% of estates, yet whenever a tabloid runs an IHT story everyone piles in to the comments say how unfair it is: most of the commentators are effectively saying that they'd like to pay more tax elsewhere so legatees can inherit more. I don't see the ALP bringing in IHT - it would be political suicide; the LNP just might, knowing that their better-off supporters aren't going to change sides.

UK tabloid commentators who know a little bit more will often state that they wish the UK could be like Australia with no IHT. This is an oversimplification: in some cases you'll incur a tax liability here that you wouldn't in UK. In UK (from memory) you get a IHT-free allowance of £325K + £175K for a PPOR (so ~A$900K in total). Bequests to a spouse are tax free. If you leave everything to a spouse, your allowance goes with them, so when they die they can effectively leave twice this amount to children etc tax free.

The crucial difference between UK and Aus is that in UK capital gains liability dies with you, so if the estate is below the threshold assets such as an IP can be sold tax free, or if inherited the new owner's tax base price will be the value at the donor's death. Here AIUI when I die and my executor sells up my IPs capital gains tax will be due and that would be the case regardless of my estate value. So my beneficiaries will be paying tax, just less obviously. Assuming my understanding of Aus tax is correct?

 

Not a fan of an inheritance tax. Instead, more should be done about the PPOR exemption and the pension.

Universal pension. Fixed lump sum taken out of your super up front (like $200k). If you don't have enough in super to cover the $200k, then the government becomes a creditor to your estate for the remaining balance. If no estate, then no worries.

Pension paid for, everyone gets it, and no need for an inheritance tax.

 

l

LOL when I first read the subject of this thread, I thought it had to do with tax policies if someone in politics actually committed political suicide.

 

Bloody academics.

 

Death duties were collected by the States before being abolished. Once Joh abolished them the other states had to follow.

Is this something the Federal Govt has the power to impose?

Cant imagine either of the majors ever even suggesting it - political suicide.

 

Wonder if you left a large chunk of your estate to the lost dogs home or Salvo's would the tax still be payable ?

 

In the UK bequests to charities and political parties are tax free. Most 'public' (private here) schools are probably charitable foundations so qualify. In addition if you leave 10% min of your estate to charity the tax rate on the balance liable to tax drops from 40% to 36%.

 

A certain amount of tax will be collected, the question is how and when. Not having an inheritance tax just means that we live with higher other taxes e.g. income tax, stamp duty, etc. Of all the ways to be taxed, when I'm dead is probably my preference. Income tax and stamp duty are far worse. I've never understood why 'death tax' is so vehemently opposed by many people in Aus.

The trade off of less tax collected during your working life (when you can afford it least) in exchange for more tax taken when your dead (when you need money least) seems like a no brainer.

 

Believe me those other taxes won't lessen just because a new death tax is brought in. It'll just be yet another tax government brings in. More tax dollars gone to fund research projects of the Red Bung beetle in the Amazon. Or some other nonsense. Or government waste.

 

Sure you don't need it when you are dead...
But the more Govco get the more they need/spend !

The majority of people I know strive to give their kids better opportunities and want to leave enough that their kids will never have to worry about money.

I was taught to spend a little, invest a little and save a little because you never know what you may need some extra money for !

Now with GST it feels like Govco want us to spend it today so they get more today, or they will tax your estate/children.

If there weren't so many Boomers with large nest eggs do you think this would have even been raised ?

 

I'm not really sure which planet you're living on. How do you honestly think this would work? There's no way they would reduce tax. This would be an additional tax. I might agree to go with this, if there was any proof that they might spend the money wisely, but we all know they won't.

 

Yup, there is no way other taxes would be reduced. In a hypothetical world where we get to design a tax system from scratch I think an inheritance tax would be a good idea.

 

Worse than that: "Estate duty became more progressive in scale, eventually peaking in 1969 with the highest marginal rate fixed at 85% of amounts in excess of £750,000, provided that total duty did not exceed 80% of the value of the total estate.". History of inheritance taxes in the United Kingdom - Wikipedia
Of course no one who had taken good advice actually paid it.