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IHT changes on the way?

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Nimrod103
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Re: IHT changes on the way?

#628788

Postby Nimrod103 » November 20th, 2023, 12:14 pm

Dod101 wrote:
Nimrod103 wrote:
I have complete faith that Hunt will seize defeat from the jaws of victory.


What nonsense. No victory in cutting the tax for IHT. As Preston says, it would add nothing to encourage growth and that above all is what we need now.

Obviously I would prefer that we did not tax estates but it is a fairly modest tax anyway. Hunt needs to encourage businesses to invest more in growth to build for the future.

Dod


IHT at 40% is not a modest tax, it is punitive and deliberately so. IHT encourages the dispersal and spending of capital, and so discourages investment and growth. Why save and build when the Govt takes another 40% out of your money, after they already took 40% when you earned it? But it is a bit late for Hunt to want to go for growth, that was Truss's policy wasn't it?

scrumpyjack
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Re: IHT changes on the way?

#628789

Postby scrumpyjack » November 20th, 2023, 12:23 pm

In my youth Estate Duty was 80% with the highest marginal rate being 85%. There was no business property relief.

Everything is relative!

Nimrod103
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Re: IHT changes on the way?

#628794

Postby Nimrod103 » November 20th, 2023, 12:36 pm

scrumpyjack wrote:In my youth Estate Duty was 80% with the highest marginal rate being 85%. There was no business property relief.

Everything is relative!


At what point did it cut in though? Only for what today what be rated as multi millionaires and billionaires.

It was estate duty which destroyed the landed gentry in UK after WW1 and 2, with so many of the great estates broken up into near sub economic units, and family owned businesses built over generations destroyed. Maybe Britain's decline begain at that time - surely a connection?

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Re: IHT changes on the way?

#628835

Postby Charlottesquare » November 20th, 2023, 3:36 pm

Nimrod103 wrote:
scrumpyjack wrote:In my youth Estate Duty was 80% with the highest marginal rate being 85%. There was no business property relief.

Everything is relative!


At what point did it cut in though? Only for what today what be rated as multi millionaires and billionaires.

It was estate duty which destroyed the landed gentry in UK after WW1 and 2, with so many of the great estates broken up into near sub economic units, and family owned businesses built over generations destroyed. Maybe Britain's decline begain at that time - surely a connection?


Business Relief is pretty generous protecting most family owned business entities.

https://www.gov.uk/business-relief-inhe ... ess-relief

Having said that I still think IHT should go and replace it with CGT on death re latent gains within assets (with spousal holdover) but including one's PPR- more would pay it spreading the load and all the untaxed house valuation uplifts would now fall in to tax. Never going to happen (would not be popular) but makes a lot more sense to me than IHT ever has.

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Re: IHT changes on the way?

#628837

Postby Nimrod103 » November 20th, 2023, 3:42 pm

Charlottesquare wrote:
Nimrod103 wrote:
At what point did it cut in though? Only for what today what be rated as multi millionaires and billionaires.

It was estate duty which destroyed the landed gentry in UK after WW1 and 2, with so many of the great estates broken up into near sub economic units, and family owned businesses built over generations destroyed. Maybe Britain's decline begain at that time - surely a connection?


Business Relief is pretty generous protecting most family owned business entities.


Can you tell me why family owned businesses should be so favoured? My business is running a portfolio of assets for the benefit of my family, yet it is not favoured.

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Re: IHT changes on the way?

#628841

Postby Lootman » November 20th, 2023, 3:51 pm

Nimrod103 wrote:
Charlottesquare wrote:Business Relief is pretty generous protecting most family owned business entities.

Can you tell me why family owned businesses should be so favoured? My business is running a portfolio of assets for the benefit of my family, yet it is not favoured.

That is the problem with a lot of taxes. Tax policy is not just about raising revenue but also about encouraging and discouraging behaviours. Should not be, in my opinion, but it is. And that is why the tax code is so complicated.

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Re: IHT changes on the way?

#628842

Postby ReformedCharacter » November 20th, 2023, 3:54 pm

Nimrod103 wrote:
Charlottesquare wrote:
Business Relief is pretty generous protecting most family owned business entities.


Can you tell me why family owned businesses should be so favoured? My business is running a portfolio of assets for the benefit of my family, yet it is not favoured.

I think the argument is that a farm, for example, or many other type of business cannot easily or economically be partly sold to pay IHT without threatening the viability of the farm or business. That is not the case with a portfolio of liquid assets such as shares. I expect you know this already.

RC

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Re: IHT changes on the way?

#628844

Postby scrumpyjack » November 20th, 2023, 4:00 pm

ReformedCharacter wrote:
Nimrod103 wrote:
Can you tell me why family owned businesses should be so favoured? My business is running a portfolio of assets for the benefit of my family, yet it is not favoured.

I think the argument is that a farm, for example, or many other type of business cannot easily or economically be partly sold to pay IHT without threatening the viability of the farm or business. That is not the case with a portfolio of liquid assets such as shares. I expect you know this already.

RC


There is already a facility to pay IHT on property assets in instalments over 10 years. I can't see any reason for BPR being at 100%. That is extremely unfair on those whose wealth is in other assets. Better to reduce the rate of IHT, lower the rate of the BPR relief and allow instalment payments for IHT on business assets. That would be more equitable and, I think, is what the all party parliamentary group recommended.

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Re: IHT changes on the way?

#628846

Postby Nimrod103 » November 20th, 2023, 4:10 pm

scrumpyjack wrote:
ReformedCharacter wrote:I think the argument is that a farm, for example, or many other type of business cannot easily or economically be partly sold to pay IHT without threatening the viability of the farm or business. That is not the case with a portfolio of liquid assets such as shares. I expect you know this already.

RC


There is already a facility to pay IHT on property assets in instalments over 10 years. I can't see any reason for BPR being at 100%. That is extremely unfair on those whose wealth is in other assets. Better to reduce the rate of IHT, lower the rate of the BPR relief and allow instalment payments for IHT on business assets. That would be more equitable and, I think, is what the all party parliamentary group recommended.


This of course is one more aspect of the unfairness of IHT. It favours some groups and relief mechanisms over others, and thus gives rise to whole complex industry of advisors.

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Re: IHT changes on the way?

#635163

Postby 1nvest » December 20th, 2023, 4:10 am

Moosehoosenew wrote:IHT rates from wikipedia

Country Top Rate
Belgium 80%[3]
Japan 55%[4]
South Korea 50%[5]
Germany 50%[6]
France 45%
United Kingdom 40%
United States 40%[7]
Netherlands 40%[8]
Ecuador 35%[9]
Spain 34%
Ireland 33%
Chile 25%
South Africa 25%[10]
Greece 20%
Taiwan 20%[11]
Finland 19%
Ukraine 18%
Denmark 15%
Iceland 10%
Turkey 10%
Vietnam 10%[12]
Brazil 8%[13]
Poland 7%
Switzerland 7%
Philippines 6%[14]
Croatia 5%
Italy 4%
Australia 0%
Austria 0%
Canada 0%
China 0%[15]
Estonia 0%
Hungary 0%
India 0%
Israel 0%
Luxembourg 0%
Mexico 0%
New Zealand 0%
Norway 0%[17]
Pakistan 0%
Portugal 0%
Russia 0%[16]
Serbia 0%
Singapore 0%[17]
Slovak Republic 0%
Slovenia 0%
Sweden 0%

Sorry about formatting.

There is a whole industry built around IHT planning in the UK, not really creating anything and often wrong as rules change.
I think it is possible if the rate comes down substantially the take may not change as much less incentive to avoid it.


Just to note that #7, the US, does come with a exemption of the first >$12 million allowance. Also whilst Ireland is lower at 33%, that's near on the total amount, low levels of any allowance/exemptions.

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Re: IHT changes on the way?

#635164

Postby 1nvest » December 20th, 2023, 4:28 am

Nimrod103 wrote:
Dod101 wrote:
What nonsense. No victory in cutting the tax for IHT. As Preston says, it would add nothing to encourage growth and that above all is what we need now.

Obviously I would prefer that we did not tax estates but it is a fairly modest tax anyway. Hunt needs to encourage businesses to invest more in growth to build for the future.

Dod


IHT at 40% is not a modest tax, it is punitive and deliberately so. IHT encourages the dispersal and spending of capital, and so discourages investment and growth. Why save and build when the Govt takes another 40% out of your money, after they already took 40% when you earned it? But it is a bit late for Hunt to want to go for growth, that was Truss's policy wasn't it?

If you're fortunate enough where 1% of the population are paying a third of the tax take, as how the UK was, then encouraging doubling or even trebling that number is a sound/good policy. Could lead to where for the same amount of government spending 97% weren't paying any taxes (fairer wealth redistribution). But the UK's opted to throw that away, instead encourage the 1% to self-exile - to the benefit of the recipient nation/states. A intentional policy for a decline in the number that are comfortable enough to fund their own families health/education spending, that otherwise alleviates the demand upon public services. Families being permitted to retain say £7 million can yield a better situation than if that £7M is confiscated and distributed across 70 million individuals each receiving 10p, or where that £7M simply vanishes out of the domestic economy.

The signs are of yet higher taxes to come as the UK's 1% self-exile and the rest have to pay 50% more just to fill that hole, which is typically precursored with a intentional "lock-down", where your wealth/capital/assets are known to the state. When others know where and how much your stack is, its no longer yours, but theirs, a loan subject to being called in at any time. Commonly nowadays individuals are happy for such state supervision/awareness, are content for the state to confiscate at any time. In prior centuries individuals were highly against such invasion of privacy, income tax was a non starter for instance as individuals would proclaim that it was none of the states business as to where and how much money/assets a individual may have.

The clear indicator is that IHT will not be lowered, is more inclined to be increased, as are both current Lab and Con policies directed towards yet higher taxation to come. LT/KK/SB were potential reversals of that downward push, but Remainers have vilified them as with decline so the UK will be more inclined to be absorbed to being under German (EU) control.

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Re: IHT changes on the way?

#635165

Postby 1nvest » December 20th, 2023, 4:43 am

Nimrod103 wrote:
scrumpyjack wrote:
There is already a facility to pay IHT on property assets in instalments over 10 years. I can't see any reason for BPR being at 100%. That is extremely unfair on those whose wealth is in other assets. Better to reduce the rate of IHT, lower the rate of the BPR relief and allow instalment payments for IHT on business assets. That would be more equitable and, I think, is what the all party parliamentary group recommended.


This of course is one more aspect of the unfairness of IHT. It favours some groups and relief mechanisms over others, and thus gives rise to whole complex industry of advisors.

Better would be exemptions that applied to all, US >$12 million for instance prior to any estate-tax/death duties/IHT becoming liable. What that 'costs' is way more than offset by the benefits - of having families remain in/come to the UK such that the 1% that pay a third of the tax-take are doubled or trebled in number, potentially leading to where 97% of the population don't have to pay any taxes. Drive that 1% away, and the 99% remainder have to pay 50% more in taxes to fill that hole.

The favouritism seemingly applied to land is a reflection of other assets being more liquid, easily shifted abroad. The state is pushing to close that down, have visibility of where each individuals money/capital is (alongside having actual invisibility of each individuals movements/actions), a open-prison state policy/practice, where individuals are in effect just being lent wealth (in a highly disproportionate manner), that's open to being partially or fully confiscated at any time of the states choosing. The disproportion is a function of those with higher amounts being more able to 'lose' that capital elsewhere. The more recent Tory party is driving such a outflow trickle, that come Lab rising to government is inclined to see that turn into a torrent. For many, already relatively high taxation is just the start, will have to see such taxes increase by at least 50% to cover the loss via outflow.


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