# Is inheritance Tax Fair?



## Booh (24 Jan 2006)

Just to put it out there...

What is the justification for taxing an inheritance? I am obviously missing something.

I understand CAT for gifts. If gifts were untaxed then there would be rampant abuse of the income tax system etc with nobody actually being PAID a salary (or only nominal salaries) and instead being given 'gifts' about the same time each month by 'employers' etc etc etc and all sorts of other things. 

But come on an inheritance????. That is an asset or collection of assets that somebody else achieved and accumulated through their own hard work with already taxed income etc. Or perhaps it's a generational thing where a house built by a grandparent or great grandparent gets passed on from generation to generation. In this day and age it is likely that such a house would end up being sold to pay off tax.

I just don't get the logic for a tax liability in such scenarios.

For example, if a parent managed to accumulate €1,000,000 through prudent investment with his/her hard earned, already taxed income. If they died and left that money to a child, why oh why should that child have to fork over 20% of nearly half of it to Revenue, over €100,000. Why? 

Why should children have to sell their parents house to settle a tax liability if they inherit an expensive house. This is especially unfair considering that for most people the biggest asset that they will inherit is a family home. Have the CAT thresholds increased in line with property inflation??? I don't believe so. 15 or 20 years ago there was probably no chance that a 'normal' family home would exceed the CAT threshold, but now you can almost guarantee it, certainly in Dublin. 

So again the same question, why is inheritance tax justified?


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## CCOVICH (24 Jan 2006)

Moved from Taxation forum.


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## tiger (24 Jan 2006)

Not a tax expert, but my understanding is that there are allowances so that when the farm, house (PPR) is left to a spouse or kids, there is little or no tax to be paid.

I had a read of this (US focused) article on wikipedia:

The main argument for seems to be that it's effectively a tax on unrealised capital gains (for large fortunes?).
The argument against is that it's a double taxation, that only occurs because of your death


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## Booh (24 Jan 2006)

Thanks for the input. You are right about the thresholds. Spouses are exempt but children are not exempt. After about €490k threshold there is a 20% Tax on the balance. My point is that if parent dies and leaves a modest 3 bed semi detatched house in say a nice suburb of Dublin for example that house is probably worth €750,000 - €1,300,000 depending on the exact suburb. Even at €750,000 that child has a tax liability €750,000- €490,000 = €260,000 @ 20% = €52,000 tax. That of course assumes that the child still has the full threshold available.

I just fail to see why that should be taxed at all.


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## d53 (24 Jan 2006)

There are two possible arguments in favour of inheritance tax.

The first is that the State needs money, and has to gather it from various sources, taking into account social equity and economic effects (especially disincentive effects).  In this view it makes sense to tax the assets of people who have died, given the alternative is to take more off people who are still alive, and might need or want the money more.

The second and related argument is social equity.  Why should my neighbour inherit (i.e. get without effort) a large amount of money tax free when I have to pay income tax on money that I had to work hard for?

By the way, I am not myself convinced by the argument about selling the family house.  If yesterday I didn't own the house, I don't see that it is an enormous inequity that today I should have to sell it and keep most of the proceeds.  I don't see why members of families with assets should get tax breaks that are not available to those without assets.

My own suggestion is that all inheritance other than between spouses should be taxed as income.

d


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## ACoz2000 (24 Jan 2006)

Maybe a good way to avoid the taxation is to name your child as the main benificiary as you may do for a life insurance policy and your wife as a person in control of the childs assets. The child should not pay the tax at all??


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## tiger (24 Jan 2006)

Booh said:
			
		

> Thanks for the input. You are right about the thresholds. Spouses are exempt but children are not exempt. After about €490k threshold there is a 20% Tax on the balance. My point is that if parent dies and leaves a modest 3 bed semi detatched house in say a nice suburb of Dublin for example that house is probably worth €750,000 - €1,300,000 depending on the exact suburb. Even at €750,000 that child has a tax liability €750,000- €490,000 = €260,000 @ 20% = €52,000 tax. That of course assumes that the child still has the full threshold available.
> 
> I just fail to see why that should be taxed at all.


 
Booh, just to clarify, is your point that the thresholds currently in place are wrong or that there should be no inheritance tax at all?

To expand you example above, say there is a family home €1.3M, and a holiday home/investment property €400K.  What would your view of an equitable tax be?


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## Brendan Burgess (24 Jan 2006)

It is a question of social equality.

You have a few people inheriting a lot of money and paying a very small tax on it. Homes are largely exempt for most people. A house worth €1m left to two children would result in tiny amounts of CAT. 

I would be in favour of dramatically rasing the rate of CAT and using the proceeds to give *every* 18 year old or 21 year old a lump sum to help them with their education, career or whatever. 

In many cases, it seems to me to be bad for kids to inherit a large amount of money. I don't know if it has been researched on a systematic basis, but I would know of many people who got too good a start in life and couldn't be bothered working hard. I also know of people who got a very good start and did work very hard. 

Brendan


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## shnaek (24 Jan 2006)

I think that someone who works hard all their life, saves hard, buys a nice house and puts aside money for a long retirement is entitled to leave their children with the proceeds of their prudent life. Capitalism rewards hard work - at least it does in its purest form. 

I can see a case for inheritance tax on people with vast wealth, but a family home should not have to be sold to pay tax. Sometimes children do not want to sell the home they were reared in. They shouldn't be forced to in a free society.


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## Winnie (24 Jan 2006)

I have to wonder are the people who are arguing above for higher CAT in the position that they will never receive such an inheritance?!

In answer to the question is it fair..........no I don't think that it is fair........but then neither is life!  Tax isnt about what is fair.....

In terms of the house example above - I think that there may be some relief if the person who inherits the house has been living in it?  I may be wrong there.........but I do know that there are certain reliefs in gift/inheritance tax.  

I don't think that I should have to pay CAT on inheritance from any family member.......but its not up to me


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## Booh (24 Jan 2006)

Hi all, thanks for the comments, this is turning into a good debate. 

To clarify, my views are as follows.

1. As the current system is not going to disappear, Inheritance tax exemptions/thresholds need to be brought in line with current property prices certainly in respect of inheriting the family home. I don't see why any child should get a tax bill for inheriting their family home. Or better still, remove the family home from inhertiance tax for spouses and children.

2. I just don't agree with the entire concept of inheritance tax. I work bloody hard. I break my back to afford a big mortgage to live in a nice home (with money that i have already paid tax on) in a nice area to raise our family. I try and squirrel away money (that i have already paid income tax on) for the future and for my spouse and children. Not for my family's future AND for the Exchequer. The Exchequer alread got it's cut of my money as I earned it and spent it on goods and services. 

3. Income tax, PRSI, VAT, VRT, road tax, bin tax, water rates etc etc they are there to pay for the running of the country. Not my hard earned assets. 

If I and my spouse were killed in the morning, our kids would have inheritance tax bills. I don't think that ANY of my assets should be taxed on my death. Why should they be, they belong to me, I don't own any of them jointly with State so why can I not give them in their entirety to my family? Why is the state entitled to a share of my personal wealth.


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## gearoidmm (24 Jan 2006)

It's all about rebalancing and redistributing wealth.  You would have to be left a lot of money to have to pay the tax and it's only 20%.

The Bush adminstration is trying to do away with both taxes on inheritances and taxes on dividends.  This could lead to a scenario where a small number of the super-wealthy pass money on to the next generation who can live, tax-free, off the inheritance.  This kind of thing would create a new aristocracy.

Because your parents were wealthy and worked hard, you have already reaped the benefits of this during your childhood and adolescence.  Taxing a percentage of the inheritance helps spread the wealth and good fortune amongst others.


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## Booh (24 Jan 2006)

Well then i guess that I am simply selfish as I am not in to the idea of redistributing wealth. I am a capitalist. You work hard and if you do well good luck to you. Certainly take care of the less 'able' in your society but i'm not happy to support the less 'bothered'. 

If the Americans create a new aristocracy good luck to them. Frankly I believe that it already exists. 

It's not necessarily the super wealthy that inhertiance tax afects the most it is the lower/middle class, i.e. those who do not have enough CASH to pay their inheritance tax bill, but those who need to dispose of the very asset that they were bequeathed in order to meet the tax bill. 

If I had a nice shiny new BMW worth €60,000 and if I wanted to leave that to my best friend on my death. If I died he would have to sell the car to meet the tax bill or else take out a loan. €60,000 - €23,906(threshold) = €36,094 @ 20% = €7,218 Tax. (assuming that he still has his full €23,906 threshold, if not he would face up to €12,000 tax.

I hear many of you thinking, not a bad deal, to get a €60,000 car for €7,218. If you feel that way you miss my point. My point is that the car was already bloody well paid for.


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## d53 (24 Jan 2006)

Booh

I think inheritance tax is one of those issues where views are stongly held.  I don't expect to convince you, and you probably won't convince me.

I see your point about the shiny BMW, and the logic about being able to give it to who you want.  But I don't see the logic of why if you are alive and you give it to your pal, gift tax makes sense, but if you are dead it doesn't.  

You say that you have worked hard for the money, and should be able to do what you want with it (when you are dead).  But what about the work the recipient does?  If my pal works hard to clean my house for me and I pay him out of my (already taxed, already worked for) money, he pays tax.  However, if he does nothing for the money, just waits until I die, he pays no tax.

I don't see that inheritance tax threatens the capitalist society.  I think that lack of an inheritance tax creates a class that have no incentive to create wealth.  And wasn't it that arch-capitalist Carnegie who said that anyone who dies with assets is a failure?

d


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## Booh (24 Jan 2006)

Hi d53, some nice comments.

In respect of Gift tax, I actually don't feel any better about it but i can see why it is necessary to stop abuse of the income tax system. I do feel that i should be able to give my friend a Car if I want (not likely to happen by the way) and i don't see why he should have to pay tax on it. It is neither a source of income nor capital growth. It's a present.

However i do accept that if there was no gift tax....... Instead of paying for items you could gift people money, therefore it is not an income and not taxable. I will gift you €60,000 and you can give me a gift of that shiny new BWM... Or i will take a modest salary of €1,000 pa and pay my PRSI but you can GIFT me the other €50,000 a year etc etc. It would take many many years to find all the loopholes to stop people abusing that. 
But as a concept i don't agree with GIFT tax either.


In terms of taxing the same Euro to oblivion, yes i have though about this. Your friend who cleans your house. If he does that for a living and if he requires payment to survive, then if you pay him an income (with your already taxed money) i accept that this money become a new source of income to somebody else and should be taxed accordingly. If he wants to defer payment until you die and get a suitable inheritance, and he accepts the risk that you may change your mind, or he could die before you..well Ok then.. I don't think it will catch on. 

As for Carnegie...when he gave away 90% of his wealth before he died back in 1919, what were the gift/inhertiance tax rules back then? How much of his wealth went in taxes and how much went to the people he gave it to


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## MOB (29 Jan 2006)

"Why should children have to sell their parents house to settle a tax liability if they inherit an expensive house. This is especially unfair considering that for most people the biggest asset that they will inherit is a family home."

I don't think that a parents home is too much different in character from a large portfolio of shares:  it is a saleable asset and the child can sell it if he\she needs to.   There is a reasonable argument to be made against forcing a child to sell the family home if the child still lives in it.  Fortunately, if the child owns no other home, our CAT code gives a specific tax exemption in such circumstances.

Capital has a tendency to accumulate.  Those who have more can accumulate more.   This is far too tempting a target for tax collectors.   Also, there are reasonable ideological arguments to be made in favour of taxing capital.     Whether due to pragmatism or ideology, taxing the transfer of capital is absolutely normal in most western democracies.    Our regime is relatively low-tax.  It used to be 40%!


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## RainyDay (29 Jan 2006)

Booh said:
			
		

> Well then i guess that I am simply selfish as I am not in to the idea of redistributing wealth. I am a capitalist. You work hard and if you do well good luck to you. Certainly take care of the less 'able' in your society but i'm not happy to support the less 'bothered'.


This point of view could be used to support inheritance taxes instead of deny them. Your kids didn't work hard to earn your house. Why should they get the benefit of it tax-free? If they work hard, they'll earn their own house.

Great to see a sensible, enlightening debate on this matter, btw.


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## Booh (30 Jan 2006)

RainyDay said:
			
		

> This point of view could be used to support inheritance taxes instead of deny them. Your kids didn't work hard to earn your house. Why should they get the benefit of it tax-free? If they work hard, they'll earn their own house.
> 
> Great to see a sensible, enlightening debate on this matter, btw.


 

I guess there are 2 schools of thought on the issue you raised above.

1 I work hard and break my back so that my children won't have to


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## Booh (30 Jan 2006)

RainyDay said:
			
		

> This point of view could be used to support inheritance taxes instead of deny them. Your kids didn't work hard to earn your house. Why should they get the benefit of it tax-free? If they work hard, they'll earn their own house.
> 
> Great to see a sensible, enlightening debate on this matter, btw.


 

I guess there are 2 schools of thought on the issue you raised above.

1 - I worked hard and broke my back so that my children won't have to
and
2 - I worked hard and broke my back so why should my children get off without having to work hard.

I must admit, I have a foot in both camps. I want to give my children any advantage that I can....but I don't want them to turn into layabouts who don't know the meaning of a decent days work.

Having said that, in my own particular case, I don't believe that my assets will support a champagne lifestyle for very long when I go. Maybe enough to help get my children on the property ladder (not enough to buy them a house each with maids etc). That is one of the reasons that I do not wish to see any of it 'wasted' on tax.


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## bearishbull (30 Jan 2006)

government will raise the tax in other ways if it didnt through inheritance so you would pay for it someway,look at it as a delayed income tax,if you had been taxed more on income in the years you were alive you would have less disposable income to invest in assets ,also government/the state provided a secure legal and economic framework which allowed you to create your wealth/assets and inheritence can repay state  for this.


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## Sherpa (30 Jan 2006)

bearishbull said:
			
		

> government will raise the tax in other ways ....


 
Niall Brady had an article in yesterday's Tribune on inheritance tax (wonder where he got the idea  ).  I can't remember his exact figures, but he was saying that the amount of revenue raised from inheritance tax was quite trivial in the overall context.


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## Booh (30 Jan 2006)

I was trying very hard not to let this debate drift off into a debate on the taxing of asstes in general, although I wouldn't mind a separate thread on the issue...in particular on property tax. 

We don't have it here YET but it is being discussed behind closed doors. Now that can be particularly unfair...(when i say unfair I mean Unequal, i.e it assumes those with the most expensive properties have the most income). This does lead on nicely from our inheritance discussion though. A child inherits an expensive house and is faced with a large property tax bill every year based on the property value and not his/her financial means. We end up back at the same point, the child having to sell the family home to pay the tax.


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## Kiddo (30 Jan 2006)

Booh said:
			
		

> I was trying very hard not to let this debate drift off into a debate on the taxing of asstes in general, although I wouldn't mind a separate thread on the issue...in particular on property tax.
> 
> We don't have it here YET but it is being discussed behind closed doors. Now that can be particularly unfair...(when i say unfair I mean Unequal, i.e it assumes those with the most expensive properties have the most income). This does lead on nicely from our inheritance discussion though. A child inherits an expensive house and is faced with a large property tax bill every year based on the property value and not his/her financial means. We end up back at the same point, the child having to sell the family home to pay the tax.


 
There was property tax about 10 years ago. As far as I can remember it was in place for a couple of years and then was abolished. 


 [broken link removed]


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## dam099 (30 Jan 2006)

Booh said:
			
		

> I was trying very hard not to let this debate drift off into a debate on the taxing of asstes in general, although I wouldn't mind a separate thread on the issue...in particular on property tax.
> 
> We don't have it here YET but it is being discussed behind closed doors.


 
I am note sure it is even behind closed doors, haven't Labour openly stated they would like to see a property tax?

I think with the present government the PD's would never go for it on ideological grounds and FF would not do something this unpopular for the more pragmatic reasons and especially not prior to the next election.


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## bearishbull (30 Jan 2006)

a lot of countries have property taxes, can help stop housing bubbles like we are having here,but i think if there was one it shouldnt be on PPR


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## shnaek (1 Feb 2006)

Property tax would be political suicide. If they need revenue they will find stealthier ways of gaining it.

Regarding inheritance tax - it is lucky we are not in the UK where inheritance is taxed at 40%! Yipes! They, like us, didn't increase the allowance level to take into account the massive rise in house prices. The wealthier British are domiciling themselves abroad for this reason - like the Irish in Portugal I guess. No inheritance tax, and no CGT.

Interesting to see also that the republicans in the US want to repeal inheritance tax, considering the US was built on the notion that you can make your own wealth, unlike 'Old Europe' where wealth was traditionally inherited.


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## hotlips (1 Feb 2006)

*Re: Is inheritance Tax Fair? - be thankful you're not French!*

I think Inheritance tax is grossly unfair but I calm down when I see the situation in France - only 76k allowance between spouses!

Between spouses there is a tax free allowance of €76,000. Amounts in excess of this are taxed according to the following table:
Taxable part (i.e. after allowances) Tax rate 
Up to €7,600 5% 
€7,601 to €15,000 10% 
€15,001 to €30,000 15% 
€30,001 to €520,000 20% 
€520,001 to €850,000 30% 
€850,001 to €1,700,000 35% 
over €1,700,000 40% 

For parents or children, there is a tax free allowance of €46,000. Amounts in excess of this are taxed according to the following table:
Taxable part (i.e. after allowances) Tax rate 
Up to €7,600 5% 
€7,601 to €11,400 10% 
€11,401 to €15,000 15% 
€15,001 to €520,000 20% 
€520,001 to €850,000 30% 
€850,001 to €1,700,000 35% 
over €1,700,000 40% 

For more distant relations, the tax allowances are smaller and the tax rates are higher. Between brothers and sisters that tax rate is 35% on the first €23,000 (after allowances) and 45% on the remainder. For other relatives (up to the fourth degree) the tax rate is 55% (after allowances). For other cases the rate is 60% (after allowances). Note that in the event of unmarried partners (unless there is a PACS) and in the event of step-children, this rate of 60% is applied.


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## sonar (1 Feb 2006)

shnaek said:
			
		

> Property tax would be political suicide. If they need revenue they will find stealthier ways of gaining it.


 
I think a property tax on 2nd, 3rd etc. properties would be acceptable if it's done in conjunction with relaxing stamp duty for first time buyers.

But to be honest I don't think anything will be done by the government or the central bank to interfere with the housing market.

We have become so dependant on construction - over 20% of non-farm jobs - that when the correction comes it is going to be very hard on us.

Nobody wants the finger pointed at them and told they crashed the market. That's why I think this market will be allowed to continue its inevitable journey without domestic interference.


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## gearoidmm (2 Feb 2006)

How can you tax inheritance between spouses?  Is it not all jointly owned anyway?

I'm not an opponent of inheritance tax in principle but those rates seem punitive


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## A.Partridge (2 Feb 2006)

I think that inheritance tax has got to be viewed as in the interests of the 'social good'. That is to say that the portion of inherited income that is taken in tax goes towards the redistribution of wealth and services to benefit ALL citizens.

I sympathise with people who feel they have little option but to sell the property or asset they have inherited but it's a sad fact that if no inheritance tax were in place we would have enormous disparity between the 'haves' and the 'have-nots' such as exists in countries like Brazil where over 80% of the land is owned by less than 5% of the people (or some similar figures). 

Goodness knows the disparity is bad enough as it is.


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## mollser (2 Feb 2006)

Booh,

When you inherit a property, say for €1m, you do so at that Market Value, of €1m. So for any future sale, the cost base of that property is now €1m. 

Without inheritance tax, the government will then never get their slice of the appreciation (fair or not, they want a bit of it!).  So you pay your 20%, over your threshold, so say, €100,000 to inherit a property worth €1m.  No bank will ever refuse such a loan backed against this property, especially as there will most likely be no debt against this house, as on death it may well be paid off, if not by the deceased, but by their insurance policy.  Yes, you still do have to repay that loan though. (rent may quite comfortably cover this)

Take it the other way, if no CAT existed, then most likely the Revenue would not allow the asset to transfer at Market Value, so you inherit a cost base of say €100,000. You go to sell at MV of €1m, you pay CGT at 20%, there's just shy of €180k gone in tax, €80k more than if you paid the CAT.  

CAT is a method whereby the Revenue get their share up front, rather than later on when the asset is disposed (if ever!).  Without CAT, you can end up with serious uncrystallised gains brewing up!


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## ISTHISALOOPE (2 Feb 2006)

NO its not a fair tax. I read in one of last sundays papers that it may be abolished.


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## ACCK01 (2 Feb 2006)

Could you tell me what paper you read that in ISTHISALOOPE? Thanks.


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## Booh (2 Feb 2006)

mollser said:
			
		

> Booh,





			
				mollser said:
			
		

> When you inherit a property, say for €1m, you do so at that Market Value, of €1m. So for any future sale, the cost base of that property is now €1m.
> 
> Without inheritance tax, the government will then never get their slice of the appreciation (fair or not, they want a bit of it!).!




Hi Mollser, I'm sorry but I don't really agree with your logic. Regardless of whether or not i paid inheritance tax on the property of €1m, when the property is ultimately sold, the government apply stamp duty to the new purchaser which is a % of the MV. So if the property is sold now, they make 9% of the MV of €1m = €90,000. If i wait 7 years and sell at €1.5m they make 9% of €1.5m = €135,000. The way i see it, they make their cut when the property is TRADED. I don't see why they should get a cut when the property is bequeathed on death. It is not being sold in this scenario (inheritance) and so I don't believe that it should be taxed. It only acquires an MV in this scenario so that Revenue can assess it for inheritance tax in the first instance. 

WARNING WARNING : RANT Follows:
As for the very sensible and altruistic comments from the proponents of social justice and wealth redistribution I am going to be honest and unpopular and say the following. 

I'm not big into wealth redistribution. If you earn it, it's yours. You should decide how to distribute it. If you have a social concisions, you are free to support local charity, donate to worthy causes etc. My social concisions is underdeveloped i fear. I fail to see why the assets that resulted out of my wealth creation should be taxed for the benefit of others who have created less wealth. My income is taxed is it not. Perhaps they created less wealth because they were not given the start in life that i got, perhaps they are lazy, unlucky, or thick...I really don't care. I don't feel responsible for others in that way. I am happy to pay income tax anp PRSI and all the stealth taxes so that our government has enough money to build a strong infrastructure, to care for the less well off, elderly, sick and indigent. To provide a comperhensive health care system etc. I do support the concept of community and everyone contributing their share to pay for things. My point is that I already do that. Just don't tax my assets when I die and tell me that you are redistributing my money. That's not okay as far as i am concerned. 

I don't believe for a moment that the tax revenues from Inheritance tax are in any way used to redistribute wealth. This is such a small revenue stream that I can't accept that it is used directly to pay for any social insurance programmes. It may, and I stress MAY save the tax payer having to borrow a couple of 10's of millions on the national debt in order to pay a few expensive consultants to prepare a report on moving a prison or to write a report into paying off the NRA or moving the health employers onto a payroll system that doesn't work for the sake of it etc etc etc. This economy is so awash with cash that it appears to me that our government have, figuratively speaking, stopped shopping in Tesco and Dunnes and now only shop M&S food hall and BTs!!!. Value for money doesn't appear to be high on the agenda. I do not like the thought of my assets being stripped of some of their value when I die, depriving my family of their true value only to provide a 'consultant report/cock up slush fund' for the government.


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## Loki (22 Feb 2006)

Did I miss something here?

I thought  the primary resident of the dead person was exempt from inheritance tax. If that is true there is no reason to sell the family home to pay a tax bill. The only tax bill will come from *other *inheritance which they can sell rather than the family home. 

Either way all income is taxable you get exemptions and allowances so don't look at it from inheritence tax being fair or not just should exemptions and allowance be increased for inheritance


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## CCOVICH (22 Feb 2006)

Loki said:
			
		

> Did I miss something here?
> 
> I thought the primary resident of the dead person was exempt from inheritance tax. If that is true there is no reason to sell the family home to pay a tax bill.


 
I think you did.  Whether the property in question is the deceased's primary residence or not is irrelevant, it is the relationship of the beneficiary to the deceased that determines the capital acquisitions tax implications.


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## gearoidmm (22 Feb 2006)

Given that this is a website devoted to financial issues and hence that the majority of people visiting it are probably in the ABC group of the population, it's interesting how many people defend inheritance tax and taxes in general as a means of passing around wealth.

This argument has been lost in the US where the republican idea of more wealth for the wealthy is generally accepted.  It would be interesting to see this argument on a site on the other side of the atlantic.  I suspect that it would have a different slant.  Still, gives me hope for the future.

Sorry Booh, your argument is well thought out and reasoned but I still can't agree that people should be allowed inherit money for nothing.  My conscience won't allow it.  You mention that people are free to give money to worthy causes and charities if they want and again this is very much in line with the fiscal conservative line of the Republican party in the US.  Problem is that they won't.


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## Loki (22 Feb 2006)

CCOVICH said:
			
		

> I think you did. Whether the property in question is the deceased's primary residence or not is irrelevant, it is the relationship of the beneficiary to the deceased that determines the capital acquisitions tax implications.



looks like you missed something

*Family Home*

   		 Under certain circumstances, there is no Capital Acquisitions Tax 		  on a gift or inheritance of a family home. This is the case 

the recipient lived in the house for the three years prior to 			 the transfer and
the recipient does not have an interest in any other 			 residential property and
the recipient owns and lives in the house for 6 years after 			 the transfer. However, this last condition does not apply to recipients who are 			 aged over 55. There are provisions made for those recipients who are unable to 			 comply with this condition because of work commitments or illness.

Not quite clear for everybody but you can avoid it if it is going to be where you live and you don't have property assets. So sell your house when your parents are sick and then live there for 6 years you pay no inheritance on it.  You don't even need to live there say if you work in another county or country.


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## CCOVICH (22 Feb 2006)

Ok, but that's a fairly restrictive requirement (I felt there was some relief available along those lines, but it isn't really likely to be applicable to many), hence why I didn't mention it. 



> I thought the primary resident of the dead person was exempt from inheritance tax.


 
If you had said that CAT was not payable in certain circumstances, fair enough.


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## Loki (22 Feb 2006)

CCOVICH said:
			
		

> Ok, but that's a fairly restrictive requirement (I felt there was some relief available along those lines, but it isn't really likely to be applicable to many), hence why I didn't mention it.


 

I did say it in a questioning manner and as people were refering to having to sell a family home I think it is extremely relevant. The restrictions mean people can get it tax free if they live there which really is what most people found most objectional. 


			
				CCOVICH said:
			
		

> If you had said that CAT was not payable in certain circumstances, fair enough.


I could say the same about your response saying it was not so


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