Why inheritance is the dirty secret of the middle classes – harder to talk about than sex

Donald Trump

https://www.boards.ie/discussion/comment/119956316#Comment_119956316

You have a lifetime CAT threshold of 335k. If your parents gift, or bequeath, you a house, worth 335k, then you pay zero tax. Are you getting that part?

I am merely telling you that that limit is there which means that the majority of people won't have to pay much, if any, inheritance tax. I didn't give any opinion on whether that should be lower or higher. Just that it is there

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-thresholds-rates-and-aggregation-rules/cat-groups-thresholds.aspx

magicbastarder

yeah, that's the funny thing about all this which i'm probably going to articulate badly; people talk about inheritance tax not being fair; when as the system stands it's pure chance really whether you're born into a family where it becomes a possibility.

people who have to worry about paying inheritance tax are - under the current system - lucky by definition (the death of a loved one aside).

Princess Consuela Bananahammock

https://www.boards.ie/discussion/comment/119956304#Comment_119956304

Because it's not a commercial or financial transaction, that's why not. Just because something has value and changes hands doesn't mean you're entitled to a percentage of it. This is governemnt going beyond it's remit and dictating to private citizens how conduct there affairs.

https://www.boards.ie/discussion/comment/119956332#Comment_119956332

It’s almost as if you are unaware that a significant number of houses in this country are valued above the CAT threshold.

Edit: I see the post you responded to used an example of a €350k house, sorry.

elperello

It's not that tax hasn't been paid on middle class people's savings it's just that they decide to do a bit of the heavy lifting for someone else when they are gone.

magicbastarder

https://www.boards.ie/discussion/comment/119956332#Comment_119956332

it doesn't really change the argument even if we got rid of the threshold. let's say you had to pay 33% tax on the inheritance, full stop.

you've just been given a house where you now have to stump up for a mortgage which is worst case scenario a 33% LTV. you'll get good rates, on a dirt cheap house.

the unfair thing about that would be is that most other people will never get that sort of gift.

joseywhales

https://www.boards.ie/discussion/comment/119956331#Comment_119956331

I get that people want to create legacy, they want to set their progeny up for success because they have evolved to propagate their genetics as far as possible for as long as possible, this is the genetic competition of life. But as a social agreement, I think it makes sense to shut this down. All it does is further exacerbate inequality of opportunity and actually weakens humanity as a whole. So it's fine people want to be selfish, it's our nature but our society should overcome individual selfishness for the sake of society.

There is one argument against too much inheritance tax that you haven't made but that I agree with. If you have say 100% inheritance tax, it will be bad because as people approach the end of life, they will lose all motivation and maybe degrade or destroy their own business and assets, that's why there is a balance, to keep people invested until the end of their lives.

Princess Consuela Bananahammock

https://www.boards.ie/discussion/comment/119956332#Comment_119956332

Ok, so you're not advoacting in terms of inheritance tax. I've been out of Ireland several years, so not sure what CAT rates are - bringing this up a little late in the game to be honest - why didn't you mention it back at the start?

blackbox

When it comes to financial matters, I generally veer towards the right and feel that taxpayers could get better value for what they pay.

However I think that inheritance tax is the most important thing to ensure (as far as it is possible) equal opportunities for all.

Some claim that the deceased's assets have already been taxed; this is true, but over their lifetime they have had the benefits from this taxation - education, healthcare, roads, police, welfare etc.

The inheritor has done nothing whatsoever to earn that money.

Why should they think they have more entitlement than someone with less rich parents. Hopefully they have benefited from their parents' example of sound financial management.

Princess Consuela Bananahammock

https://www.boards.ie/discussion/comment/119956326#Comment_119956326

The question remains unanswered: why should I have to take on additional burdens simply to move into a house I already legally own?

The idea - in the midst of a housing crisis - of trying to make it difficult for someone to move into their own property is mindboggling.

joseywhales

https://www.boards.ie/discussion/comment/119956365#Comment_119956365

Isn't the point that you don't own the house, you own 66% of the house?

Congrats on the free 66% of a house by the way. Luckily you were born in the right family.

Donald Trump

https://www.boards.ie/discussion/comment/119956358#Comment_119956358

I don't know what you are saying.

I am merely saying that it won't be a big issue for most people. The only people it will be an issue for are those that inherit a large amount. Those people can well afford it and won't get any sympathy from me for whinging

https://www.boards.ie/discussion/comment/119956355#Comment_119956355

I think you are trying to hard to associate IHT with some form of Darwinism, I doubt most parents think of inheritance as a form of protection of their bloodline. Passing on what you have toiled for isn’t selfish any more than buying what you want to for your children, or paying for their education is. For most parents, society can look after itself, but we want to look after our children. Family first.

ziggyman17

The sooner this shithole of a country crashes and burns the better, spend your life working paying your taxes and your way, then leave the family home to your kids and they are taxed to **** on money already paid, I am **** sick of this social welfare state, homeless this and **** that, myself and my parents were supposedly homeless 30 years ago, we went to live in our grannies box room until we could get something else........

Princess Consuela Bananahammock

https://www.boards.ie/discussion/comment/119956388#Comment_119956388

I gave you a scenario in which inheritance tax was unfair, you agreed with it.

My final word, again, goes back to my initial assessment: you seem to think most people who inherit are already rich (which is not always the case). And I'm done here - I proved what I set out to prove.

Princess Consuela Bananahammock

https://www.boards.ie/discussion/comment/119956386#Comment_119956386

No, you own the house. The government doesn't inherit 33% of the house any more than the government doesn't earn 25% of your income.

Tax is a payment to the state - it's not the State's to begin with.

66% of a house is useless if you simply want to live in it - would you be happy paying rent to live in 66% of a room?

joseywhales

https://www.boards.ie/discussion/comment/119956395#Comment_119956395

I mean it's not hard for me to associate this with darwinism, you just ended your post with "family first", where do you think that desire comes from?

I'm sure they don't care about society but they have benefitted from it and they are part of it. Society should impose a tax not out of some form of envy or spite but because it is better for society to try as best we can to create equal opportunity for all people so that the competition drives us all to greater output and innovation.

One eyed Jack

https://www.boards.ie/discussion/comment/119956365#Comment_119956365

You’re expected to take on an additional burden because you’re now benefiting from an additional asset. You’re expected to pay tax on based upon the value of the inheritance. The amount of tax you pay (if any), will vary depending upon your relationship to the person you’re inheriting from -

https://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html

When @Dav010 mentioned the Super-wealthy earlier, the reason they pay little in taxes is because most of their wealth is tied up in investments like shares and stocks which provide them with dividends, and they pay tax on that, rather than the original principal amount.

elperello

If you leave money or property to someone in your will Revenue don't care about their personal circumstances.

They could be unemployed or have a sick kid but it is all the same to Revenue.

joseywhales

This is just a guess but perhaps the high inheritance in Ireland might be associated with our relatively low wealth inequality (which is still too high). Surely history(monarchy) shows us how poor heredity is as a system.

magicbastarder

https://www.boards.ie/discussion/comment/119956365#Comment_119956365

the housing crisis is a factor in that it has pushed people into having to pay inheritance tax where they might not have had to (due to excessively high prices), yes. but letting someone inherit a house without paying inheritance tax would have absolutely zero effect on mitigating the housing crisis.

getting an (at most) 33% mortgage on a house is probably the easiest way possible of buying a house. and as has been mentioned several times, in reality it probably won't be much more than about 10% for the vast majority anyway.

https://www.boards.ie/discussion/comment/119956437#Comment_119956437

Monarchy may show how poor monarchy is as a system, but I’m not sure how it is an example of how poor hereditary taxation is.

ziggyman17

If you are left a house by your parents in a will and you do not sell the house, do you still have to pay tax on the house ?

Allinall

https://www.boards.ie/discussion/comment/119956483#Comment_119956483

https://www.boards.ie/discussion/comment/119956365#Comment_119956365

Yes. If the value is over the tax free amount.

Donald Trump

https://www.boards.ie/discussion/comment/119956405#Comment_119956405

No. I never agreed that anything was unfair. You keep responding to my posts but with guff which is unrelated to mine

You have proved nothing, except whatever circular "thinking" is going on in your own head

magicbastarder

there's also this condition on inheriting a house tax-free if you've been resident in it:

"a child wishing to inherit a home worth €500,000 tax free would need to live in the family for three years leading up to the inheritance. In addition, they would not be allowed to own any other property and must reside in the property for six years after they take ownership – and are precluded from owning another property during the six year period."

https://www.chill.ie/blog/do-i-have-to-pay-tax-on-a-house-that-i-have-inherited/

eggy81

https://www.boards.ie/discussion/comment/119956502#Comment_119956502

Couldn’t make it up but they did. Especially the 6 years after part. More or less saying your having a laugh if you think your going to have anything handy in this place.

magicbastarder

it's a fairly straightforward piece of logic - you're exempt from the tax if you've nowhere else to live. if you do have somewhere else to live, you lose the exemption.

and it stops people from say claiming the exemption, and then selling the house - which would make a mockery of the reason for the exemption.

Princess Consuela Bananahammock

https://www.boards.ie/discussion/comment/119956493#Comment_119956493

https://www.boards.ie/discussion/comment/119956446#Comment_119956446

https://www.boards.ie/discussion/comment/119956427#Comment_119956427

It's nothing to do with the "super-wealthy" and neither that link nor any law on the statute books that I'm aware of expect you to do anything.

https://www.boards.ie/discussion/comment/119956400#Comment_119956400

It's the entitlement:"they got something so we should get something too! Wahhhh!"

@magicbastarder (don't know how this multi-threading works now, sorry for being in the wrong order) - it gives someone a secure roof over their head which is the whole point of housing. And again - same as loans - why are you putting obstacles in place to stop someone from moving into a house they already own? Kafka would love this (not to mention the socialists most of people on here love to hate)

@Allinall perhaps you included my post in error - but I still don't see an answer to my question which was "why" not "what".

The whole thread is pure entitlement. Someone else is doing better, regardless of why, so they should pay me. Anyone who is doing better should be dragged down with us. Socialists won’t be happy until everyone is poor.

thegame983

It is the government's prerogative to limit home ownership for the ordinary person. Inheritance tax aids this goal.

Taxes raised will be used to provide incentives for investment firms to purchase property which you can rent for 50 - 80% of your monthly income.

Don't worry you won't be passing on much to your children (if you can afford them)

One eyed Jack

https://www.boards.ie/discussion/comment/119956551#Comment_119956551

It's nothing to do with the "super-wealthy" and neither that link nor any law on the statute books that I'm aware of expect you to do anything.

You’ll become aware of it should you ever find yourself in a position where you’re obligated to pay taxes on an inheritance in Ireland, but just because you’re not aware of something doesn’t mean it doesn’t exist -

https://www.irishstatutebook.ie/eli/2003/act/1/section/11/enacted/en/html#sec11

It has everything to do with the “super wealthy” when the point is being made that it’s a tax on middle class savings, and your idea that because you inherit a property you shouldn’t have to pay tax on the value of your asset that as far as the State is concerned - you own it, you’re benefiting from it’s ownership, and you can leverage it to generate even greater wealth for any future generations should you decide to pass on the asset to someone else who will then become the beneficiary, and again have to pay tax based upon the value of the asset and their relationship to you.

Donald Trump

https://www.boards.ie/discussion/comment/119956575#Comment_119956575

It is quite the opposite. Inheritance tax helps to prevent wealthy families from hoovering up all the property and hoarding it through the generations.

HerrKuehn

It seems to be mainly an issue for urban middle class. There is agricultural property relief for those inheriting farms, because it is completely different, apparently, to inherit millions in agricultural land. I think it should be the same across the board.

I would like to pass on what I have built up to my kids (and also whatever my parents leave as I don't really have any need for it). I will look into ways to do this in the most efficient way possible. I would rather bulldoze the house than pass it on to the state.

sameoldname

https://www.boards.ie/discussion/comment/119956575#Comment_119956575

Actually, if the government could get away with it, they would love to go back to pre-2008 housing policy. Anyone, regardless of ability to pay could get a low interest rate mortgage, loads of construction jobs and everyone felt like they were getting richer. Of course, it was all built on unsustainable levels of debt but no one seemed to give a shite about that at the time.

Donald Trump

https://www.boards.ie/discussion/comment/119956570#Comment_119956570

Says the poster who appear to be hanging their future on getting a juicy inheritance.

I would advise not to count one's chickens before they hatch. If you are lucky, you won't be left anything and then you won't have to worry about inheritance tax

magicbastarder

https://www.boards.ie/discussion/comment/119956631#Comment_119956631

the state doesn't get the house?

thegame983

Imagine being pro higher taxes. The government laugh as they use your money to give their mates tax breaks and incentives.

thegame983

https://www.boards.ie/discussion/comment/119956636#Comment_119956636

Good for him/ her.

Donald Trump

https://www.boards.ie/discussion/comment/119956631#Comment_119956631

There is agricultural relief and business relief. Both are theoretically available to any citizen and reduce the amount inherited to 10% of it's value.

You are free to purchase agricultural land if you so wish. It is actually common enough that people do that. 7.5% stamp duty upfront mind which will eat into your savings. The recipient will either have to attain an agricultural qualification or lease the property to someone who is qualified. They also have to satisfy an asset test. And they have to keep the property for at least 6 years before disposing of it. You can do that if you want. Or invest your money in a company and if you set things up correctly, the beneficiary can avail of the 90% reduction.

eggy81

https://www.boards.ie/discussion/comment/119956638#Comment_119956638

If you inherit a house and want to sell it is it first subject to inheritance tax and then Cgt after you sell it?

Furze99

The premise of the OP is unadulterated rubbish.

Donald Trump

https://www.boards.ie/discussion/comment/119956672#Comment_119956672

The inheritance will be subject to CAT.

If you later sell it, you will pay CGT on the difference between the CAT and the sale price unless it was your primary residence. Same as any other asset.

Allinall

https://www.boards.ie/discussion/comment/119956672#Comment_119956672

You have to pay the inheritance tax regardless of whether you sell it or not.

Capital gains only comes into play if the value goes up between when you inherited it and when you sell it, and then only if you haven’t lived in it as your main residence.

gipi

One annoying aspect of inheritance tax here is how people without children are treated

If I have a home worth 300k, I can leave it to a son or daughter without any inheritance tax to be paid.

If I leave it to a sibling or nibling (coz I don't have a child), they can only inherit about 32k before tax hits - so the 300k house will attract inheritance tax of about 90k. Gravy for the government!

Danno

https://www.boards.ie/discussion/comment/119956355#Comment_119956355

Under no circumstances should the government tax what I leave to my kids. Everything I build up in my life is going to them. I've paid my taxes and enough is enough. It seems the wasters and leeches are not happy with ~35% on all earnings and at least 23% on whats purchased after earnings.

What do the wasters want if they're not happy with ~58% of everything as it stands? Fcukin communists.

Donald Trump

https://www.boards.ie/discussion/comment/119956796#Comment_119956796

https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-reliefs/favourite-nephew-or-niece-relief/index.aspx

Up to you to make your own planning.

Donald Trump

https://www.boards.ie/discussion/comment/119956803#Comment_119956803

You will be happy to know that whatever you leave your kids won't be taxed.

However your kids may be taxed depending on the value that is left to them.

The irony of going on about leeches and wasters while asserting that you don't want your children to have to contribute their fair share (well only a small amount in all likelihood) to the running of the State.

sameoldname

https://www.boards.ie/discussion/comment/119956803#Comment_119956803

Actually, seeing as our effective corporate tax rate is only 12.4% as of 2021 which is very low by OECD standards (The US is 22.3% for comparison.) it'd be fairer to say your taxes are going to pay for corporate tax breaks more than leachers and wasters. It's not very communist though.

thegame983

It's a shame we can't masquerade as charities so we can operate tax free like the governments' mates at the vulture funds.