Alan Shatter's campaign to abolish Inheritance Tax

Status
Not open for further replies.
Purple said:
Are you suggesting that people will spend their wealth rather than give it to their children because their children will have to pay tax on it?
Click to expand...
No that's not what I'm suggesting. My point is very clear. Read it again if it has eluded you.
 
Ceist Beag said:
A number of the posts on this thread are at the extreme end of things, e.g. €3m inheritance to children, businesses being inherited, etc. However the vast majority of cases will be much much less than that. As others have said, why should my hard work and savings (which have already been taxed to the hilt) be further diluted by the government dipping their hand in once again when they are passed on to my children. I may have accumulated those savings by being prudent/frugal and avoiding lavish spending. Why should I (or my children) be punished for that. Would it have been better to spend it all while I'm alive, possibly even spend it on my children so that they get the benefit while I'm alive? That appears to be what is being encouraged by such proposals. But wouldn't that leave me in a more vulnerable financial state as I get older?
Click to expand...
232,000 Irish households had net wealth (assets less debt) of more than €1m in 2022. That figure is likely to have grown.
 
Purple said:
Okay, I've read it again and it's not clear to me. Can you expand on it please?
Click to expand...
"Inheritance taxes disincentivise work and sacrifice and actually encourage the wasteful dissolution of inherited wealth" isn't exactly cryptic.
 
T McGibney said:
"Inheritance taxes disincentivise such work and such sacrifice and actually encourage the wasteful dissolution of inherited wealth" isn't exactly cryptic.
Click to expand...
Great - if it's not cryptic, you'll have no bother expanding on it so Purple (and me, I must be a bit slow on the uptake this morning too) can understand what you're driving at.

I fixed the quote too, as the work and sacrifice you referred to were the good and noble ones aimed at not being a financial burden on others in old age.
 
torblednam said:
Great - if it's not cryptic, you'll have no bother expanding on it so Purple (and me, I must be a bit slow on the uptake this morning too) can understand what you're driving at.
Click to expand...
The statement stands on its own merits. As such, I have no wish to expand on it.
torblednam said:
I fixed the quote too, as the work and sacrifice you referred to were the good and noble ones aimed at not being a financial burden on others in old age.
Click to expand...
Please don't put into my quotes, words that I did not utter.
 
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.
Click to expand...

Here's what you said - where did I misquote you?
 
Brendan Burgess said:
I join with Purple and troubledman to say that I have no idea what it means either. Well, I suppose I understand what it means, but I don't understand how it means that.
Click to expand...
That's odd, Brendan. It's a very straightforward point. I have seen people inherit very valuable assets and not bother to even maintain them because they perceive the work/risk/reward ratio not to be worth it. It's a key reason why there is so much dereliction in the country. Inheritance taxes impact on that ratio.
 
T McGibney said:
I have seen people inherit very valuable assets and not bother to even maintain them because they perceive the work/risk/reward ratio not to be worth it.
Click to expand...

I hope you advise them against this ridiculous line of thinking.

If I inherit an investment property and I have to pay €660k CAT, I might resent it. But there is no advantage to me in letting the property fall into ruin. I am not getting the CAT back.
 
T McGibney said:
That's odd, Brendan. It's a very straightforward point. I have seen people inherit very valuable assets and not bother to even maintain them because they perceive the work/risk/reward ratio not to be worth it. It's a key reason why there is so much dereliction in the country. Inheritance taxes impact on that ratio.
Click to expand...
There's no accounting for folk, literally and metaphorically.

Why would anyone deliberately allow their wealth to diminish because they would have to pay less than a third of any increase in tax? It seems like a remarkably stupid thing to do.
 
Brendan Burgess said:
I hope you advise them against this ridiculous line of thinking.

If I inherit an investment property and I have to pay €660k CAT, I might resent it. But there is no advantage to me in letting the property fall into ruin. I am not getting the CAT back.
Click to expand...
Maybe in this scenario your parent is letting the investment property fall into dereliction so that you inherit less and so have to pay less CAT.
 
Purple said:
There's no accounting for folk, literally and metaphorically.

Why would anyone deliberately allow their wealth to diminish because they would have to pay less than a third of any increase in tax? It seems like a remarkably stupid thing to do.
Click to expand...
That's exactly the point. Human beings are routinely irrational, often to the point of remarkable stupidity and even beyond that.
 
@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.
 
Status
Not open for further replies.
Back
Top