Inheritance Tax

[BoldonLad]

While rising house prices may be the source of many, possibly most, peoples "wealth", there are other means of accruing "wealth" of course, via various types of Investment, property is simply one of the methods.

 

[BoldonLad]

There's more than one way to skin a cat.

Maybe they could be thought of in the same way, it's all about controlling how much wealth people have and how much the currency's worth. Our house has increased in value since we bought it yet the mortgage is costing us more per month now. From my point of view that might as well be a tax increase.

I am no expert in economics, but, as my simple head understands it, interest rates are simply an application of the Law of Supply and Demand, ie, increasing the price of money, decreases demand. Interest rates are the price of money.

But, IMHO, this is a rabbit hole, does it matter how the wealth was accumulated, provided it has accumulated legally?

 

[winjim]

While rising house prices may be the source of many, possibly most, peoples "wealth", there are other means of accruing "wealth" of course, via various types of Investment, property is simply one of the methods.

I don't think house prices should be a means of accruing wealth though. I didn't buy a house as an investment, I bought it because my family need somewhere to live.

 

[BoldonLad]

I don't think house prices should be a means of accruing wealth though. I didn't buy a house as an investment, I bought it because my family need somewhere to live.

Me too.

But, the whole system of mortgages etc is built on rising house prices, why else would any sensible Financial Institution loan hundreds of thousands of pounds to someone like myself? Their security is in the property, and, their ability to foreclose, if the borrower defaults.

 

[winjim]

I am no expert in economics, but, as my simple head understands it, interest rates are simply an application of the Law of Supply and Demand, ie, increasing the price of money, decreases demand. Interest rates are the price of money.

But, IMHO, this is a rabbit hole, does it matter how the wealth was accumulated, provided it has accumulated legally?

And decreased demand slows inflation.

The response I'd give to your second paragraph is that, as JRM's position upthread illustrates, legal and ethical are two different things, and anyway isn't this thread, and this forum, discussing what would happen if we to change the law?

 

[winjim]

Me too.

But, the whole system of mortgages etc is built on rising house prices, why else would any sensible Financial Institution loan hundreds of thousands of pounds to someone like myself? Their security is in the property, and, their ability to foreclose, if the borrower defaults.

Yes. The whole system is rotten. Houses should not cost hundreds of thousands of pounds. Ordinary people should not be having to throw themselves at the mercy of said financial institutions.

 

[BoldonLad]

And decreased demand slows inflation.

The response I'd give to your second paragraph is that, as JRM's position upthread illustrates, legal and ethical are two different things, and anyway isn't this thread, and this forum, discussing what would happen if we to change the law?

I have already said I am no expert in Economics, but, I don't think the first bolded statement is always true, isn't there such a situation as "stagflation", where economic activity fails to rise, or, declines, but, inflation continues to rise?

IMHO, Economics is on a par with witchcraft.

As I read it, the OP asked what the forum thought of Inheritance tax?, it has since wandered off into the typical British persons favourite topic after the weather, ie house prices.

 

[winjim]

I have already said I am no expert in Economics, but, I don't think the first bolded statement is always true, isn't there such a situation as "stagflation", where economic activity fails to rise, or, declines, but, inflation continues to rise?

IMHO, Economics is on a par with witchcraft.

As I read it, the OP asked what the forum thought of Inheritance tax?, it has since wandered off into the typical British persons favourite topic after the weather, ie house prices.

Well quite, I've certainly reached the limit of my understanding of the functioning of the economy.

But... my original point was that I was wondering if there might be some sort of way to have inheritance and other wealth taxes track the economy, or inflation? Would that work and make the tax system fairer? Or is that essentially what the govt and BoE are trying to do anyway?

 

[BoldonLad]

Well quite, I've certainly reached the limit of my understanding of the functioning of the economy.

But... my original point was that I was wondering if there might be some sort of way to have inheritance and other wealth taxes track the economy, or inflation? Would that work and make the tax system fairer? Or is that essentially what the govt and BoE are trying to do anyway?

I would have thought it perfectly possible. But, it is not happening, fiscal drag is the term, I believe. A sort of stealth tax increase.

 

[Bromptonaut]

You can now leave £325,000 tax free. Anything over this will be taxed at a rate of 40%, or 36% if you donate at least 10% to charity.

The only way around it I guess is to give away your wealth and then survive at least 7 years.

All sorts of ways of leaving far more than £325k without having to pay IHT. Allowance unused on death of first one of a couple can be carried forward to the second. There are additional amounts, up to £1million?, around leaving your home to your children. And that's before lifetime gifts, gifts out of income etc. and more sophisticated planning.

 

[theclaud]

View: https://twitter.com/David__Osland/status/1664244423033487361?t=tAizRyBzu8M-SMsHLzHtqg&s=19

 

[slowmotion]

This is nonsense on stilts. The tax is on the transaction. The hatred of inheritance tax amongst the wealthy is just bog standard class asset-hoarding and wagon-circling against economic justice.

Should parents be allowed to give things to their children?

BTW, most animals seem to.

 

[theclaud]

Should parents be allowed to give things to their children?

View: https://youtu.be/nC9BBLSZZdQ


In what world is your question a sensible response to my post?

 

[slowmotion]

View: https://youtu.be/nC9BBLSZZdQ


In what world is your question a sensible response to my post?

I thought it was quite a straightforward question.

Suppose you work hard all your life and have some savings when you are old. Should that money be confiscated by The State when you die?

 

[theclaud]

I thought it was quite a straightforward question.

Suppose you work hard all your life and have some savings when you are old. Should that money be confiscated by The State when you die?

We can all play at this belligerent and disingenuous style of non-argument, if that's the way you want it. Supposing half a million nicker lands in your lap not through any work or merit, but because your rich dad just kicked the bucket, should the State seek to mitigate the unfair advantage you have over around 93% of your peers?