Wealth distribution through property taxation

Princess Calla

kippy wrote: »

This is a nonsense argument.
They haven't paid tax on "earning" the money.
In a similiar way that your employer has most likely already paid some form of tax on the money they are gifting you for your services.

How is it nonsense?

I want to buy my boyfriend a nice rolex or omega watch....it's over the 3k threshold, so technically they should be paying tax on the balance of the gift.

Or to give a gift as I please do I have to pay for the gift and also cover the tax liability generated? Which in itself is another tax liability!

Ush1

Any time there is a transfer of wealth, taxman must get his pound of flesh.

air

It's nonsense as wages are a fully allowable expense for corporation tax purposes.
Wages are paid from operating profit before any taxation.

holyhead

Princess Calla wrote: »

I stand to get very little off my folks, what I do get will be covered by the threshold anyway.... If I'm not disinherited first

However I really hate anyone ie revenue dictating how I manage my assets. If I want to gift someone something or if I want to leave something to someone in my will, I would really prefer that they get the full value of the gift.

I've already paid tax on earning the money.

You are spot on. Inheritance tax is an absolute swindle by the state. Redistribution of wealth my eye. It's nothing less than gouging.

Fol20

Sleepy wrote: »

The only ones against inheritance taxes are those greedy ****s who want what their parents / grandparents earned and aren't prepared to put the work in to earn it themselves.

If we taxed such unearned wealth properly, we could greatly reduce income taxes.

Wow, talk about absolutely awful self awareness of what you just said. Reverse the situation:

""The only ones for inheritance taxes are those greedy ****s who wont inherit money enough to pay tax on it and and instead of being happy for others that were gifted it want to take a cut of someone else's money and are not prepared to put in the work themselves to earn it

Complete nymbyism by you. As long as it benefits you, you are happy.

AndrewJRenko

c.p.w.g.w wrote: »

I'm not going to have anything to inherite from either of my parents. I do think the treshold is a bit on the low side, many folks out there unable to keep their family home due to the tax...

Are there really many people in such circumstances? There would have to be;
1 - Family home with asset value above the threshold, after any care costs/Fair Deal scheme deduction

2 - Sole child surviving, who doesn't already have their own family home, but not already living in the family home



I'm sure there are some of these, but there really isn't that many.



If there was a sole child who was going to move into the family home, perhaps there is a case for some exemption if they continue to live there for say, 5-10 years, but these cases would few and far between.

Princess Calla wrote: »

I stand to get very little off my folks, what I do get will be covered by the threshold anyway.... If I'm not disinherited first

However I really hate anyone ie revenue dictating how I manage my assets. If I want to gift someone something or if I want to leave something to someone in my will, I would really prefer that they get the full value of the gift.

I've already paid tax on earning the money.

Asset taxes or wealth taxes of some form are fairly common across Europe. It's fairly reasonable to tax assets as well as income, to avoid excessively punishing those who work for a living.

Princess Calla

AndrewJRenko wrote: »

Asset taxes or wealth taxes of some form are fairly common across Europe. It's fairly reasonable to tax assets as well as income, to avoid excessively punishing those who work for a living.

Just because something is fairly common doesn't mean I have to like it or will stop me from voicing my displeasure.

AndrewJRenko

Princess Calla wrote: »

Just because something is fairly common doesn't mean I have to like it or will stop me from voicing my displeasure.

I don't think any of us particularly like paying any tax. We still need to have a reasonable and fair system to fund the public services that we all use.

Sleepy

elperello wrote: »

From my experience quite a lot of parents/grandparents are against inheritance tax too.

Most of them have a lot of time for their families which is why they want them to inherit as much as possible.

Are you suggesting a reduction in the thresholds?

Given free reign? I'd eliminate the thresholds entirely and tax inheritance / parental gifts at the marginal rate (or higher).

No one likes paying tax but taxation is necessary to fund the state and, imho, taxation of unearned wealth (such as inheritance) is far fairer and more equitable than the taxation of income from one's work.

Sleepy

Fol20 wrote: »

Wow, talk about absolutely awful self awareness of what you just said. Reverse the situation:

""The only ones for inheritance taxes are those greedy ****s who wont inherit money enough to pay tax on it and and instead of being happy for others that were gifted it want to take a cut of someone else's money and are not prepared to put in the work themselves to earn it

Complete nymbyism by you. As long as it benefits you, you are happy.

Your sentence doesn't make any sense though. The person inheriting money hasn't put in any work to earn it. They've just been lucky enough to be born to parents who either (a) were prepared to put in the work or (b) inherited it themselves.

anewme

AndrewJRenko wrote: »

I don't think any of us particularly like paying any tax. We still need to have a reasonable and fair system to fund the public services that we all use.

The thresholds for people with small families or no children are not fair, they are a joke.

kippy

kippy wrote: »

This is a nonsense argument.
They haven't paid tax on "earning" the money.
In a similiar way that your employer has most likely already paid some form of tax on the money they are gifting you for your services.

We are taking about close relations here not an employer paying their employee.

Money earned (and taxed) by a parent should be considered the family’s money and should not be liable for taxation moving it around within the family the same as you wouldn’t tax money earned by a wife and given to her husband.

wexfordman2

AndrewJRenko wrote: »

Are there really many people in such circumstances? There would have to be;
1 - Family home with asset value above the threshold, after any care costs/Fair Deal scheme deduction

2 - Sole child surviving, who doesn't already have their own family home, but not already living in the family home



I'm sure there are some of these, but there really isn't that many.



If there was a sole child who was going to move into the family home, perhaps there is a case for some exemption if they continue to live there for say, 5-10 years, but these cases would few and far between.



Asset taxes or wealth taxes of some form are fairly common across Europe. It's fairly reasonable to tax assets as well as income, to avoid excessively punishing those who work for a living.

I would rather burn my house down, than hand it over as a so called "wealth tax". Its my house, I earned it, I paid for it, and I paid every cent of tax due on it, and it is my prerogative to give it to my kids to give them a leg up the ladder.

Its shocking how gullible people are to fall for the type of argument that giving or inheriting within direct family is some sort of undesirable action, and that they would rather hand over taxation of a family home to be squandered by the state while of course feeding the kids into the commercial rental market.

Disgusting

Sleepy

John Proud Outfielder wrote: »

We are taking about close relations here not an employer paying their employee.

Money earned (and taxed) by a parent should be considered the family’s money and should not be liable for taxation moving it around within the family the same as you wouldn’t tax money earned by a wife and given to her husband.

Ah, the same wonderful loophole used by so many of our great "businessmen" to avoid paying their debts when the recession hit: the house is in the wife's name.

Fol20

Sleepy wrote: »

Your sentence doesn't make any sense though. The person inheriting money hasn't put in any work to earn it. They've just been lucky enough to be born to parents who either (a) were prepared to put in the work or (b) inherited it themselves.

How does it not make sense. You have a clear bias in that you want to pay less tax yourself as I suspect you won’t make the threshold to pay the inheritance tax so you are happy for others to pay it yet at the same time you also want to pay less tax. The highest earns already pay the highest share of taxes, yet people want them to continue to pay more.

The only people who should decide where that money goes is the the parent and no one else. If the parents decide to burn it, give it to Sinn Fein or their children, that’s their prerogative as they worked hard for their money. The government shouldn’t have any claim on money that was already taxed.

Bass Reeves

Amirani wrote: »

Not necessarily. Much pension savings can be taken tax-free and at a lower tax rate in retirement, so it's not necessarily just deferred taxation.

It is money on which the tax is deferred on. It is put back through the taxation system again. Government use this method so taht people will not be totally dependent on the state in there old age. As well people that have pension are more likly to fund more of there Nursing home care than those that have not. it is a win win for the state. As well remember that any inheritance in cash form is the surplus left over after nursing home case.

A lot of people are getting away from the original point of the OP. He was advocating and I quote

In the interests of equity, fairness, and social cohesion, Ireland should learn it's lessons and hold it's hands up to say where direct government intervention benefits one set of people above another to the unprecedented extent it did (but bills all of the next generation) then that generation and any benefit they try accrue to the offspring should be heavily, heavily taxed. And I mean very heavily. Tonne of bricks heavy.


Lets look at nursing home charges at about 50K/year. If OP's tax plans were put in place it would be a huge disincentive to many to care for there parents, husbands, wifes, aunts and uncles( maybe minded by brother and sisters so as to preserve inheritance for there children) to care for these people which often takes a load of time and has implications on life and mental health. By implementing penal rates of tax as OP suggested it could put nursing home and the health system under severe stress more so than present.

I have no issue with the present system maybe some modificatons and make the band one common sum across all inherited money which is equivlent to about 10 yeras after tax wages.

elperello

Sleepy wrote: »

Given free reign? I'd eliminate the thresholds entirely and tax inheritance / parental gifts at the marginal rate (or higher).

No one likes paying tax but taxation is necessary to fund the state and, imho, taxation of unearned wealth (such as inheritance) is far fairer and more equitable than the taxation of income from one's work.

I doubt there would be any political support for eliminating the thresholds altogether.

If such as you propose was done it would lead to widespread evasion.

I agree that taxation is a necessary part of the functioning of any state.

Taxation on income is based on ability to pay. Inheritance tax is not because Revenue has no idea of the personal circumstances of the beneficiary.
They could be millionaires or on their uppers the same amount of tax would apply.

Do you think some sort of assessment on beneficiaries would be fair?

the_syco

Sleepy wrote: »

Given free reign? I'd eliminate the thresholds entirely and tax inheritance / parental gifts at the marginal rate (or higher).

No one likes paying tax but taxation is necessary to fund the state and, imho, taxation of unearned wealth (such as inheritance) is far fairer and more equitable than the taxation of income from one's work.

The money would just get moved out of the country sooner, or put into trusts.

IMO, either you pay good accounts to hide your cash, or the taxman will take your cash. Trust funds, grandchildren pensions, etc. All legal ways of hiding the money from the taxman.

Just more people will look to hide it earlier if their money will go to the state after they die.

hmmm

elperello wrote: »

Taxation on income is based on ability to pay. Inheritance tax is not..

Oh come on. The recipient of an inheritance would have received €335,000 tax free before being asked to pay 33% tax on any further receipts, the poor mouth won't work here.

Meanwhile someone starts paying 20% tax on almost any income they receive from work.

elperello

hmmm wrote: »

Oh come on. The recipient of an inheritance would have received €335,000 tax free before being asked to pay 33% tax on any further receipts, the poor mouth won't work here.

Meanwhile someone starts paying 20% tax on almost any income they receive from work.

I'm not using the poor mouth just teasing out the issue.

As I said in the post inheritance tax does not take into account the circumstances of the beneficiary.
Certainly €335,000 is a nice nest egg to receive.
However a person with rent to pay who has a handicapped child to take care of gets the same as a millionaire with a mansion and a bungalow in Spain.

Do you think the circumstances of the beneficiary should be taken into account or not?

Austria!

wexfordman2 wrote: »

Its my house, I earned it, I paid for it, and I paid every cent of tax due on it, and it is my prerogative to give it to my kids to give them a leg up the ladder.

This seems inconsistent. You make a big deal that you earned the house and paid all the tax due on it, as if earning something and having paid tax on that is important, and then you say you want your kids to have something completely unearned tax free.



For the sake of a fair society why should your kids have a leg up on the ladder? If they want success they can get it through education and hard work, not by getting a handout.

elperello

Austria! wrote: »

This seems inconsistent. You make a big deal that you earned the house and paid all the tax due on it, as if earning something and having paid tax on that is important, and then you say you want your kids to have something completely unearned tax free.



For the sake of a fair society why should your kids have a leg up on the ladder? If they want success they can get it through education and hard work, not by getting a handout.

I'd say most people think earning something and paying tax on it is indeed important and see no contradiction in their being allowed to use it as they see fit.

Their kids might not be fit enough to work or clever enough to benefit from education. The revenue is blind to such situations the person leaving the money is not.

What they have been saying in this thread is that they would prefer to use the money they have saved after tax to give their kids a leg up and not the neighbour's kids if you will.

Sleepy

Sleepy wrote: »

Given free reign? I'd eliminate the thresholds entirely and tax inheritance / parental gifts at the marginal rate (or higher).

No one likes paying tax but taxation is necessary to fund the state and, imho, taxation of unearned wealth (such as inheritance) is far fairer and more equitable than the taxation of income from one's work.

This is hardcore levels of begrudgery on display here.

Austria! wrote: »

For the sake of a fair society why should your kids have a leg up on the ladder? If they want success they can get it through education and hard work, not by getting a handout.

No such thing as a fair society, parents who can should give their children every advantage they can to get ahead of others, they children should benefit 100% and not “society”.

Cyrus

The irony is the state did better out of inheritance tax when the thresholds were higher and the rate lower.

As others have said increase the tax and you increase the length people will go to to avoid it

Bass Reeves

elperello wrote: »

I'm not using the poor mouth just teasing out the issue.

As I said in the post inheritance tax does not take into account the circumstances of the beneficiary.
Certainly €335,000 is a nice nest egg to receive.
However a person with rent to pay who has a handicapped child to take care of gets the same as a millionaire with a mansion and a bungalow in Spain.

Do you think the circumstances of the beneficiary should be taken into account or not?

Hard cases make bad law. However there is AFAIK also extra clauses in inheritance where an inidividual has lived in a dwelling and inherits it.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/exemption-for-dwelling-house/index.aspx

Also it is not like when one reaches the threshold everything else is taken. It is a 310K tax on the excess so

500K inheritance tax about63K
1 million tax 230K

pwurple

The difficulty is really around the property market, as that's the main asset. The average value of a house in Dublin is 375,862. Which means more than 50% of people in Dublin are over that inheritance limit, if they have one child.

Basically, if your house is worth over 335k, to minimise the tax on your estate you need two kids. Your house goes over 600k in value, go for the third child.

Bass Reeves

pwurple wrote: »

The difficulty is really around the property market, as that's the main asset. The average value of a house in Dublin is 375,862. Which means more than 50% of people in Dublin are over that inheritance limit, if they have one child.

Basically, if your house is worth over 335k, to minimise the tax on your estate you need two kids. Your house goes over 600k in value, go for the third child.

First off even with one child on a 500K house tax element is 63K even if you have to value it at this amount. On Two or more children house will usually be disposed. With two childern tax element on a one million euro house is 126K euro between the two. If a child is living in the house longer than 3 year they inherit tax free.

I cannot see the issue

elperello

Bass Reeves wrote: »

Hard cases make bad law. However there is AFAIK also extra clauses in inheritance where an inidividual has lived in a dwelling and inherits it.

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/exemption-for-dwelling-house/index.aspx

Also it is not like when one reaches the threshold everything else is taken. It is a 310K tax on the excess so

500K inheritance tax about63K
1 million tax 230K

I might just reply by saying bad tax rules make for good evasion.

You are correct regarding the link you gave but you have not referred to some other exemptions namely Business Relief and Farming Relief. These reliefs protect the real wealth involved in inter-generational transfers.

https://www.lawyer.ie/probatewills/inheritance-tax/

We know they don't take it all over the threshold but at least one poster here supports that.

You haven't addressed the question of whether there should be an assessment of beneficiaries means before they have to pay.

Bass Reeves

elperello wrote: »

I might just reply by saying bad tax rules make for good evasion.

You are correct regarding the link you gave but you have not referred to some other exemptions namely Business Relief and Farming Relief. These reliefs protect the real wealth involved in inter-generational transfers.

https://www.lawyer.ie/probatewills/inheritance-tax/

We know they don't take it all over the threshold but at least one poster here supports that.

You haven't addressed the question of whether there should be an assessment of beneficiaries means before they have to pay.

TBH business and agriculture relief is restrictive and benifits only where real wealth is transferred. I remove these reliefs or curtail them. However there is a case for maintaining small business's . On the other hand it is possible to minimise tax by reducing these values.

two options reduce rates on business's which are active and creating employment or allowing tax to be paid over a longer period.

I see no point in accessing beneficiaries a tax rate and relief is a tax rate and relief

elperello

Bass Reeves wrote: »

TBH business and agriculture relief is restrictive and benifits only where real wealth is transferred. I remove these reliefs or curtail them. However there is a case for maintaining small business's . On the other hand it is possible to minimise tax by reducing these values.

two options reduce rates on business's which are active and creating employment or allowing tax to be paid over a longer period.

I see no point in accessing beneficiaries a tax rate and relief is a tax rate and relief

Exactly those reliefs protect real wealth while someone passing on a house and a couple of hundred grand from a lifetime of hard work is caught in the net.

They have to face the prospect of Revenue taking money from their estate that may be badly needed by a family member.

It seems you don't see any point in taking into account the ability to pay but I'm not quite sure.