The news that David Cameron got £500,000 tax-free from his parents raises the question of how or whether inheritances should be taxed. My view is that they should be, and heavily so.
Certainly, a lot of the defences of inheritance look pathetically weak. For example:
WASHINGTON — U.S. President Barack Obama is applying pressure on Republicans to negotiate a fiscal deal, arguing that GOP leaders have rejected his past attempts to strike a bigger and more comprehensive bargain.
“They have had trouble saying yes to a number of repeated offers,” Obama said during an interview on NBC’s “Meet the Press” show that aired Sunday.
Gee, thanks. Few of us ever have to pay gift tax. Logically, more people should. Taxable gifts avoid tax when compared to passing an asset through a taxable estate because only the amount given to a donee is subject to gift tax, while the estate is taxable on its whole value — not just the amount that goes to the donee. Confusing?
As I have said previously, capitalists support the estate and inheritance taxes. Not those that see themselves as nobility, and call wish to be called capitalists, that want to reward the children of the wealthy (because we all know they need more advantages than they already get). While the Democrats voted in favor of capitalism (letting those who earn wealth prosper) instead of supporting nobility, as has been the recent trend, they did so only for the richest few.
Yesterday (on “Tax Day”) NPR’s Scott Horsley was wondering about the prospects for doing something better about the Bush tax cuts this year. He got a similar reaction from me, NYC Mayor Michael Bloomberg, and the Tax Policy Center’s Bob Williams–although I got to pull out an expression I believe my mom first taught me,
The inheritance tax in France is 45%, in Belgium it's 3%. France has a wealth tax, Belgium doesn't. Wealthy French have known and used these loopholes for quite some time, but appeal of such schemes is on the rise following massive tax hikes of president Francois Holland.
Writing in The Times over the weekend, Prime Minister David Cameron and Mr Osborne said those who worked hard for their homes should be able to pass them on to family members.
At present, inheritance tax is payable at 40 per cent on the value of an estate in excess of the tax-free allowance of £325,000 per person. Married couples and civil partners can pass the allowance on to each other.
The decision is welcome news for many farmers, many of whom own a farmhouse but no longer own all of the surrounding agricultural land. Agricultural land ordinarily attracts agricultural property relief from inheritance tax and where the farmhouse on the land ‘is of a character appropriate to the property’, which means that the farmhouse is proportionate in size to the farmed land surrounding it, then the farmhouse also attracts agricultural property relief.