Alan Shatter's campaign to abolish Inheritance Tax

And of that 13%, how many of them will have just one inheritor? So that 1m could be split 4/5/6 etc ways.

And of that 1m, how much of it is in a house that has potentially doubled in value over the course of the last 20 years? Majority of my current wealth in unearned - tax free pension contributions and growth and a home that has capital appreciation that I did nothing to earn and therefore paid no tax on. If I put my money into shares instead of buying a house, I would be paying tax. So while I can benefit from the generous pension and PPR tax reliefs, if I crystalise the profit and gift them or leave them to my children as an inheritance, then they pay the tax. Seems fair to me!
 
T McGibney said:
The sort of people I'm referring to Brendan wouldn't ever dream of engaging with an accountant or any other professional advisor. Their money is too valuable to waste it like that.
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So just to be clear, are those people the disincentivised ones you were talking about earlier?
T McGibney said:
It is a good and noble thing to work hard and make sacrifices in order to avoid as much as one can ever do, becoming a burden on one's family, siblings or the State in advanced old age.

Inheritance taxes disincentivise such work and such sacrifices and, irony of ironies, actually encourage the wasteful dissolution of inherited wealth rather than its preservation and productive use.
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Because I'll have to agree to disagree with you, if you believe tax policy should be predicated on what self-sabotaging lunatics are liable to do. They are the type of person who will invariably find some other rock to perish on...
 
misemoi said:
And of that 13%, how many of them will have just one inheritor? So that 1m could be split 4/5/6 etc ways.
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I think this is a key point often left out by the proponents of abolishing inheritance tax. It may become more of a feature going forward as family sizes shrink but even larger estates are often inherited with mininmal tax liabilities where the money is willed to miltiple kids and grandkids. You'd swear every family was a 2 parents and an only child they way some go on.
 
T McGibney said:
Why not?

I firmly believe all public policy formulation should take that into account.
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I'm with @torblednam on this one.
torblednam said:
Because I'll have to agree to disagree with you, if you believe tax policy should be predicated on what self-sabotaging lunatics are liable to do. They are the type of person who will invariably find some other rock to perish on...
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Bronte said:
Very rich man, with influence wants to put pressure on lawmakers so his accumulated assets can be passed on tax free.

BTW I hope he succeeds. Can’t stand the idea of more taxes on what we’ve paid income tax on already.
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The only way to avoid more taxes on what you've already paid income tax on is to immediately burn all money you receive.
 
And a lot of it is to do with education. Most people know if you sell your PPR, no CGT applies for the majority of folk. They know income tax rates, VAT rates etc. They seem blindsided by the gift/inheritance tax. So when they are calculating how much they might get out of an inheritance they need to really understand fees and taxes that also apply.
 
torblednam said:
Despite some posters' hyperbole, I'm yet to see anyone who was financially ruined by a CAT liability.
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Nobody here has made such a claim.

I did point out that the implementation of Brendan's idea of the indefinite deferral and ultimate clawback of CAT business relief would likely mean that inheritors of valuable going-concern businesses could face ruin if their businesses failed in the meantime while the deferred liability remained unpaid.

But that's a hypothetical point as that idea has never previously been implemented. That's why you haven't seen it.
 
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misemoi said:
And of that 13%, how many of them will have just one inheritor? So that 1m could be split 4/5/6 etc ways.

And of that 1m, how much of it is in a house that has potentially doubled in value over the course of the last 20 years? Majority of my current wealth in unearned - tax free pension contributions and growth and a home that has capital appreciation that I did nothing to earn and therefore paid no tax on. If I put my money into shares instead of buying a house, I would be paying tax. So while I can benefit from the generous pension and PPR tax reliefs, if I crystalise the profit and gift them or leave them to my children as an inheritance, then they pay the tax. Seems fair to me!
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I'm in the same boat; most of my wealth is unearned; either the capital appreciation of my home or the appreciation on my pension, funded with tax free earnings and grown as the result of money printing by central banks. I'm very well paid but what wealth I have accrued is not from that earned income.
 
misemoi said:
And a lot of it is to do with education. Most people know if you sell your PPR, no CGT applies for the majority of folk. They know income tax rates, VAT rates etc. They seem blindsided by the gift/inheritance tax. So when they are calculating how much they might get out of an inheritance they need to really understand fees and taxes that also apply.
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And they need to not be greedy little piglets, expecting not to have to pay tax on a big trough of someone else's money.
 
torblednam said:
Because I'll have to agree to disagree with you, if you believe tax policy should be predicated on what self-sabotaging lunatics are liable to do. They are the type of person who will invariably find some other rock to perish on...
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Me, I believe that tax and other policy should recognise for example that this country has a pretty serious dereliction problem that sooner or later needs to be confronted and solved. Blithely assuming that all owners are rational and capable beings will undermine rather than assist efforts to do so.
 
Purple said:
I'm in the same boat; most of my wealth is unearned; either the capital appreciation of my home or the appreciation on my pension, funded with tax free earnings and grown as the result of money printing by central banks. I'm very well paid but what wealth I have accrued is not from that earned income.
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Exactly! I despair at the USC 8% and the PRSI on all my salary. If we are to reduce taxation in any way then that is where people should be concerned!
 
T McGibney said:
Me, I believe that tax and other policy should recognise for example that this country has a pretty serious dereliction problem that sooner or later needs to be confronted and solved. Blithely assuming that all owners are rational and capable beings will undermine rather than assist efforts to do so.
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I think that getting the Land registry and registry of deeds on the same page and getting the State to operate the property tax system in a competent manner would be a more productive and gainful way of tackling what I agree is a major problem.
 
Purple said:
I think that getting the Land registry and registry of deeds on the same page and getting the State to operate the property tax system in a competent manner would be a more productive and gainful way of tackling what I agree is a major problem.
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The tax system is actually a pretty bad way of dealing with people who are irrational and/or incapable.
 
torblednam said:
@Ceist Beag since you are not concerned about the rare case of the people with millions, let's consider how the tax operates, as it is a quite progressive tax:

Inheritance valueTax-free thresholdTaxable InheritanceTax (@33%)Effective rate
100,000335,000NilNilNil
200,000335,000NilNilNil
300,000335,000NilNilNil
400,000335,00065,00021,4505.4%
500,000335,000165,00054,45010.9%
600,000335,000265,00087,45014.6%
700,000335,000365,000120,45017.2%
800,000335,000465,000153,45019.2%
900,000335,000565,000186,45020.7%
1,000,000335,000665,000219,45021.9%
1,250,000335,000915,000301,95024.2%
1,500,000335,0001,165,000384,45025.63

As you said yourself in response to another poster, only 13% of households have net wealth in excess of €1m. so the majority of all people will be in line to inherit an amount that is exempt, if anything.

To me, CAT functions as a wealth tax, and a reasonably good one. Despite some posters' hyperbole, I'm yet to see anyone who was financially ruined by a CAT liability.
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Yeah once the threshold remains high it shouldn't be a concern for the majority (of which I will be a part) so personally I am not arguing on behalf of the really wealthy. However, as with any tax, these are subject to change so the main concern I would have is if a government got in who decided the threshold was too generous (yes SF I'm looking at you).
 
Ceist Beag said:
So about 13% of the households, or in other words the vast majority have net wealth less than this.
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Which might be relevant if the total number of households / the denominator was at all relevant to the point I was making.

232,000 x €1m minimum is a big number. And I’d venture that a lot of people would be surprised to hear that the number is that high.
 
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