Alan Shatter's campaign to abolish Inheritance Tax

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Just putting it out there:

If anyone is so upset about the prospect of paying 33% tax on their inheritance please feel free to have mummy/daddy write me into their will - I'd gladly figure out how to deal with the tax cost of any windfall gains that might come my way.
 
Just putting it out there:

If anyone is so upset about the prospect of paying 33% tax on their inheritance please feel free to have mummy/daddy write me into their will - I'd gladly figure out how to deal with the tax cost of any windfall gains that might come my way.
Yes, a good problem to have. I hope I have a massive inheritance tax bill at some stage in my life, maybe at many stages in my life. If ever I have a pay millions in CAT or inheritance I'll be a very happy man.
 
If anyone is so upset about the prospect of paying 33% tax on their inheritance please feel free to have mummy/daddy write me into their will - I'd gladly figure out how to deal with the tax cost of any windfall gains that might come my way.

It could be the ruin of you!

Most inherited or gifted going-concern businesses ultimately cease trading and are never subsequently sold. What happens the deferred tax bill then?

The deferred tax is paid.

So the now former business person is ruined.
 
@Brendan Burgess, is the proposal now that all such taxes are deferred until the family sells the business? What happens if they get outside investment, funded with a share in the business, in order to grow the business?
 
Fair enough, I think we do disagree. I think that if I make some incremental effort to earn an extra €100k, and I’m left with only €48k, I should be free to gift that money to my kids, or indeed to you, and it should be nobody’s business. Tax paid cash in my back pocket should be mine to do whatever I want with.

As an aside, it’s a joke that the State keeps the majority of someone’s incremental earnings. The highest rate of total income tax should be no more than 49%.
This logic is so prevalent and I genuinely can’t understand how so many people buy into it.

You are absolutely free to do whatever you want with it. You won’t pay a penny of tax on it if you decide to gift it to someone else.

The person receiving it is a different story. Whether it be the plumber fixing your leak or a relative doing nothing. They should be assessed for a form of a tax.

All money is taxed infinitely many times and almost without exception when it passes from one individual to another. Why gifts should be carved out as an exception to this is bizarre to me.
 
This logic is so prevalent and I genuinely can’t understand how so many people buy into it.

You are absolutely free to do whatever you want with it. You won’t pay a penny of tax on it if you decide to gift it to someone else.

The person receiving it is a different story. Whether it be the plumber fixing your leak or a relative doing nothing. They should be assessed for a form of a tax.

All money is taxed infinitely many times and almost without exception when it passes from one individual to another. Why gifts should be carved out as an exception to this is bizarre to me.
It’s bizarre to me that people keep equating traders in business to make a profit with private citizens receiving a gift.

What about the UK that doesn’t tax gifts? What about Australia that doesn’t have inheritance tax at all?
 
How so? You've only paid tax on it once. Just buy the pint out of the €350k you got tax free.
The hint was on the term taxed inheritance
First taxation on the income which provided the inheritance
Second taxation CAT
Third taxation vat + excise duty.
 
The hint was on the term taxed inheritance
First taxation on the income which provided the inheritance
Second taxation CAT
Third taxation vat + excise duty.
Fourth tax is the income tax that the publican pays.
Fifth is the VAT he pays when he spends your hard earned on expanding his collection of fake moustaches.
This game can go on forever.
It's almost like the State needs a continuous flow of tax money, from a variety of sources...
 
It’s bizarre to me that people keep equating traders in business to make a profit with private citizens receiving a gift.

What about the UK that doesn’t tax gifts? What about Australia that doesn’t have inheritance tax at all?
It’s not equating the two. It’s trying to peel back the emotional nonsense arguments people use to argue against inheritance tax. ‘It’s a double tax’ ‘it’s a tax on death’ ‘it’s an envy tax’ ‘I should be able to do whatever I want with my after tax money’

We have a society where almost all money is subject to a set of tax rules upon passing from one person or entity to another. The appropriate tax to apply should then be decided primarily on economic merits. It’s almost impossible to construct a rationale, economic argument as to why someone who receives money for nothing should pay less tax than someone who receives money for working or investing capital.

It just doesn’t make any economic sense from the point of view of maximising output. Nor, in my view, does it make sense in the context of wanting a meritocracy.
 
Like a lot of socialist ideas, it also ignores the fact that capital can be mobile. People can exit the Irish tax system and pay zero.
It doesn’t ignore it in the same way having income tax, CGT or Corporation tax doesn’t ignore it. Theres an acknowledgement we need to raise a certain amount of money and we do so in the best way we can, without going too far and creating too much of a competitive disadvantage. Every country will do this their own way.

It is an interesting point though. I can only speak for myself but my wife and I regularly consider moving abroad for a lower income tax and likely will live in Bermuda someday. As it stands we would both inherit 7 figure sums at some point between today and 30 years from now.
The idea we would leave Ireland (and our parents) so we can get €5m instead of €3.7m at some unknown future date is genuinely laughable to me.

The thing about CAT is it’s overwhelmingly people who will never ever pay it (old people) who seem to care about it. I often wonder do they get as worked up about the marginal income tax rate of the waiters they tip.

I have a group of fairly economically right wing friends in their 30s. We’d moan about income taxes pretty often (especially in bonus season). Inheritance tax has literally never been mentioned. And if anyone ever did mention it, they’d quickly told to stop being a scrounger and earn their own money.

After all, is there anything more socialist than complaining that you’re not getting enough of someone else’s hard earned money for doing nothing?
 
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If you're going to poke fun at my arguments Brendan whenever they disagree profoundly with yours, at least have the decency to do so in context.

We're not in a schoolyard here.

Exactly how much context do you want? You have made it clear that most inherited businesses fail. That if you inherited a business you would sell it and pay the tax.

So I have drawn troubledman's attention to it to warn him that if he inherits a business, he might be ruined by it.

Most inherited or gifted going-concern businesses ultimately cease trading and are never subsequently sold. What happens the deferred tax bill then?

So the now former business person is ruined.

Charming.

I'm suggesting that your proposal, viz.

would ruin many people who inherit businesses that ultimately fail (ie most of them).

So your family is down over a million in CAT within 10 years, all because they suffered successive bereavements?

Would it not be more honest just to confiscate all private property and shoot everyone who objects?

Me, I think I'd take the money and pay the tax rather than be lumbered with someone else's business for 6 years.
 
Exactly how much context do you want? You have made it clear that most inherited businesses fail. That if you inherited a business you would sell it and pay the tax.

So I have drawn troubledman's attention to it to warn him that if he inherits a business, he might be ruined by it.
If my inheritance of a business was conditional on the concurrent acceptance of personal liability for a Revenue debt which would require me earn €1.2m in order to afford to stump up repayments during my period of ownership, I'd certainly be doing thorough due diligence on the business before accepting the inheritance.

You?

In the real world, most family businesses cannot sustain a burden of this scale.
 
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Hi Tommy

I would do due diligence on any business - however, if it's a gift I wouldn't spend too much on professional fees.

If it were overvalued for CAT purposes I would just accept it, sell it, and pay the CAT.

If I got €2.335m and had to pay €660k CAT, I think I could live with it.

If I were to get a farm and I could sell off sites to pay down the CAT, I would certainly consider it.

Brendan
 
Hi Tommy

I would do due diligence on any business - however, if it's a gift I wouldn't spend too much on professional fees.

If it were overvalued for CAT purposes I would just accept it, sell it, and pay the CAT.

If I got €2.335m and had to pay €660k CAT, I think I could live with it.

If I were to get a farm and I could sell off sites to pay down the CAT, I would certainly consider it.

Brendan
My point here is that what I said above is a valid opinion even if you disagree with it.
It ill behoves you to mock it.
 
It doesn’t ignore it in the same way having income tax, CGT or Corporation tax doesn’t ignore it. Theres an acknowledgement we need to raise a certain amount of money and we do so in the best way we can, without going too far and creating too much of a competitive disadvantage. Every country will do this their own way.

It is an interesting point though. I can only speak for myself but my wife and I regularly consider moving abroad for a lower income tax and likely will live in Bermuda someday. As it stands we would both inherit 7 figure sums at some point between today and 30 years from now.
The idea we would leave Ireland (and our parents) so we can get €5m instead of €3.7m at some unknown future date is genuinely laughable to me.

The thing about CAT is it’s overwhelmingly people who will never ever pay it (old people) who seem to care about it. I often wonder do they get as worked up about the marginal income tax rate of the waiters they tip.

I have a group of fairly economically right wing friends in their 30s. We’d moan about income taxes pretty often (especially in bonus season). Inheritance tax has literally never been mentioned. And if anyone ever did mention it, they’d quickly told to stop being a scrounger and earn their own money.

After all, is there anything more socialist than complaining that you’re not getting enough of someone else’s hard earned money for doing nothing?
I’m not so sure about the difficulty of moving away. We’re talking about people with money here, let’s call a spade a spade. Lots of people with money retire abroad, or at least have a place abroad. Lots of kids study or work abroad in places where gifts aren’t heavily taxed, or aren’t taxed at all. It’s just a case of aligning the two. Not entirely straightforward, but not rocket science either.
 
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