In his Pre-Budget Statement, A. Darling re-packaged the existing IHT thresholds. Was anyone fooled by this?

Question

A combined £600,000 IHT threshold for husband and wife or civil partners was already possible by effective tax planning.
There is no tax change there, only a punishment to those who paid for complex wills to be drawn up, which excluded me.
It seems to me that IHT is a regressive tax, rigourously collected, at a time when relatives are still grieving.
Surely, it is more civilised to levy and collect taxes from the living, allowing the more responsible, who prefer to save and provide for their offspring rather spend the kid's inheritance, the opportunity to do so. The tax uptake can be the same, but the latter option is inately more progressive.
Further, many individuals feel discriminated against by the existing IHT regulations. What about single people?
What about the increasing numbers of couples who decide to co-habit, and choose not to marry? What about individuals who were married and are now divorced? What about couples currently married who subsequently divorce?

Answer 1

No

Answer 2

1) yes it was, the move to make it standard was in the interests of ensuring that the tax relief was available to everyone, not just those who in past times would have been dab hands at tax avoidance.
2) IHT is only levied at an amount above quite a sizeable sum. There remain ways around it for those who choose to plan well ahead.Any child who receives the equivalent of 600,000 quid should be well set for their future. It seems to me quite a sensible way of ensuring a tax burden is placed upon those who have got substantial funds.
3) Marriage has always been and always will be a part of the tax system. While I do not necessarilt support this, I can see how it avoids having to differentiate between the couples living together in a marriage type arrangement and those who are cohabiting for convenience sake. There is no dicrimination, as the tax and pensions implications for couples are available clearly for everyone to see and should, rationally, be considered as part of the decision whether or not to marry. The choice is entirely theirs, but they cannot say they weren't warned. Yes, by marrying you get some tax benefits, but on the other hand you render yourself open to the divorce settlement laws - swings and roundabouts.

Answer 3

IHT is an iniquitous tax. Its predecessor, estate duty, was intended to tax the estate of the landed gentry who could otherwise pass their wealth from generation to generation. IHT on the other hand is set at such a low level that it catches those who are not "wealthy" by any stretch of the imagination and who have accumulated what little wealth they do have out of their post tax income. IHT therefore for the vast majority of people represents a second charge to tax. In the hands of the Labour government it is simply an extension of the politics of envy.

Answer 4

All Tax is theft .. they dead don't complain as much as the living, so it's easier to Tax the dead ... (especially as they don't vote)

Answer 5

Who said that the Sheriff of Nottingham is dead !

Answer 6

You should post this question in UK tax

Answer 7

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