What is the point of inheritance tax?

Answer 1

It's a "hidden" tax that didn't used to affect many people, but was seen as redistributive as only rich people paid it. With the rocketing house prices in England, people who really aren't rich at all are having to pay it, so it's being noticed. Now it brings in too much money for it to be scrapped. Just so you know, Gordon Brown is responsible for lowering the threshold so as to hit the middle classes with yet more taxes without making headlines.

Answer 2

Orginally the tax was for the rich to pay but the gov have not kept it in pace with infaction. Then of course the gov changed the rules so that the rich farm owners could pass down their home and land to the kids etc.
The rich also have ways of avioding the tax which is now becoming available to the ordinary person who has more money and property above the tax level which is around about £287k at death per person.
Go to a good seminar on the subject and learn.

Answer 3

It gives the government a great deal of revenue, from the people left to deal with the paper work after some one has died. Before the legacies are given, the government takes 40% of anything above the allowable threshold that a dead person leaves. This used to only affect the very rich people, but these days most of us will fall into this tax bracket. The price of a house had risen so much, that now most people who own their own house and car and have any savings will be caught in the inheritance trap. My advice, spend your money or give it to your children before you die, otherwise you will be giving it to the government.

Answer 4

As a general principle tax is levied on money received, and also when it is spent.

Income tax, corporation tax and capital gains tax generally cover your income.

VAT, stamp duty IPT, etc. are levied when money is spent.

Inheritance tax is levied on the money which you failed to spend and on which you managed to avoid the other taxes on spending.

I prefer to think of it in this way, as a deferred expenditure tax, rather than a wealth tax.

Answer 5

To provide the government with an easy income while insuring that people who have worked hard to gain wealth in their lifetime cannot pass it on to their children without either paying up (to the government) or paying lawyers to try and avoid paying. Either way someone else gets your money not your family. Good show eh!

Answer 6

It's a way for government to tax the same money again and get more of it.

Answer 7

To make money out of people who are unable to complain about it - i.e. dead people.

It's just another way of taxing you on money you've already earned:-

They tax you once when you earn it
They tax the interest you earn if you save it
They tax the goods you buy if you spend it
Then when you die they tax what's left

Answer 8

to help pay for the NHS, army police fire brigade schools road maintance etc

Answer 9

another way for the gov to rob you silly