Inheritance tax

seamus wrote: »

It's not really any different from any other kind of tax. Wealth gets transferred, and the government takes a cut of the transfer.

You could use the same argument against any tax tbh - "Why should I spend my whole month working my ass off, only to have the government take away 42% of my pay"

Inheritance tax to a certain extent makes sense because it spreads the wealth around. Without it, families can effectively hoard assets and wealth indefinitely, a black hole into which inflationary gains disappear, never making their way back into the state.

The only alternative is an ongoing wealth tax, which requires a declaration each year of a person's entire estate and levies a payable tax on that. But that's very complicated and time-consuming to chase. Plus it doesn't take account of the individual's liquid wealth in a given year. Far easier and fairer to just lop it off the top when you die.

Are the thresholds and taxes too low/high? I don't know. Whatever way you look at it, it's free money for the recipient. The recipient hasn't specifically done anything to earn that inheritance. There's no injustice being done on anyone - the person who put in all the work is dead, so he's not losing anything.

It's not free money, somebody has worked and paid for the asset already. It's a cheap tactic to generate easy income for the government.

Inheritance tax shouldn't be there to "spread the wealth around" that's communism you speak of. It's counter productive. What's wrong with a hard working family "hoarding" their wealth?

It's similar to comparing two people on social welfare;

A) Person makes 30K, doesn't save much, takes multiple holidays, owns a nice car and lives for the now. Has no savings so recieves full social welfare.

b) Person also makes 30K, saves as much as possible over a number of years, uses public transport, takes national holidays, doesn't have huge expenses. Has over 20K in savings. Loses job but doesn't get full social welfare.

I'm talking about the welfare you get after 10 months unemployed. It's punishing responsibility, or rewarding irresponsibility, whichever way you want to look at it.

Paulownia wrote: »

I don't understand the theory of free, if your parents leave you money it is not free, it belonged to them. you can be as thick as you like about it, and I can only assume you are not in that situation or you would have a more mature view. Try going to live in Russia if you do not believe in people having the right to property.

I do understand it and will no doubt be in the situation when my parents pass away. If they choose to leave their house to us, it's their house, they bought it.. We contributed squat to it and it is therefore a windfall asset and taxable.

Then again, the hard pressed "middle class" you refer to are probably more likely to be eyeing their inheritance hungrily rather than just accepting it - and its liabilities - when it happens.

Deleted User wrote: »

Its a double tax, simple as that.

Imagine going down to the pub and your mate buys you a pint, you turn around and a revenue inspector asks you for €1.65 tax because you inherited the pint from your mate.

Brewery buys malt and barley from farmer- farmer pays tax.

Brewery sells keg to publican- brewery pays tax.

Publican sells pint to Mick- publican pays tax.

Inheritance tax is no different.

homerjay2005 wrote: »

not the issue at all. the problem here is the man is now forced to sell the property, to pay off a debt that is completely nonsense - had this debt not existed, he wouldnt have to sell.

the government dont own the property, so should not have any claim to tax on it.

Nobody has to sell anything. They could remortgage - rent it, divert savings to pay it off (converting the cash savings into asset savings), etc. I would assume family homes are usually sold after inheritance in the majority of cases.

If anybody here is finding it hard to deal with a free asset windfall of 420k with 100k outstanding tax on it, please transfer it to me immediately, thx.

Legally (and morally), the wealth owned by parents doesn't belong to their offspring. Despite this, many people view the wealth of their (still living) parents as "my inheritance". So of course it feels objectionable when the state takes a chunk.

Within this state, a couple can be viewed as a single unit for tax/inheritance purposes. The concept is being undermined by tax individualisation, but it still exists somewhat. The expectation is that these two people are responsible for each other financially for life. What one owns is shared by the other. So there are no limits on inheritance between them. You might argue that there is no inheritance, since they jointly own everything anyway.

Offspring are different. The expectation is that offspring will make their own way in the world, and won't be dependent on the parents once they leave the nest. An inheritance is treated as a windfall, and so it's taxed.

The argument that "the state needs the money" can and has been used to justify all kinds of dubious grabbing of money from the public. With inheritance taxes, there's at least some moral justification.

Of course, this being Ireland, we need to protect "the most vulnerable". In this case, there are exemptions for business owners and farmers. And the wealthy can use "prudent financial planning" to avoid the worst.