Alan Shatter's campaign to abolish Inheritance Tax

The Horseman said:
How many pension pots were wiped out following the 2008 financial crisis?
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I think that the main cause of pension pots being wiped out was people borrowing money in their pension funds to buy property.

Most people did not borrow in their pension funds and most did genuinely diversify and so they survived the crisis ok.
 
I was just reading this article in the journal and I wonder is it correct. It says 97% of people do not pay inheritance tax, so nothing to see here, it won’t affect you.

But this is usually once in a lifetime event. On the death of your second parent (as usually the spouse inherits everything when the first parent dies). So in any given year when a second parent dies how many pay inheritance tax?

Deaths. There were 35,459 registered deaths in Ireland in 2023, of which 18,361 were males and 17,098 were females. There were 29,700 deaths registered for persons aged 65 and over in 2023 and this accounted for more than four-fifths (83.8%) of all deaths.

So assume parents are over 65 - 30K in a year, assume 50% were the second parent, - 15K. Then you need to account for the number who dies who have no children (or do you as nephews/nieces may inherit). Let’s stick with 15K. Is the real question - how many of those 15K have assets that breach the inheritance threshold? Let’s say 70% (home ownership average, although the chances are older people are more likely to own a house).

So could you say 70% of those whose second parent dies in any year would be likely to pay inheritance tax? Only 0.2% of the population but since it is a once in a life time event very significant to you in that year. And since it impacts so few people every year should the government scrap the tax. It is not significant to the majority of the population and it impacts the individual significantly only once.
 
Yes it is significant but there is an underlying asset inherited on which the tax is based. So they can settle tax from own resources and keep the asset or sell the asset to pay the tax. Or if the inheritance is cash then they net less cash than was inherited. So they have resources to fund the tax, it's not a tax on their normal income.
 
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