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OECD calls for higher inheritance tax after Covid pandemic


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Inheritance tax should become a larger slice of government tax revenue after the pandemic, according to a report by the Organisation for Economic Cooperation and Development (OECD) that warns wealth inequality will rise over the next decade unless death duties also increase.

A more robust tax on inheritances that prevents the use of avoidance measures by the super-wealthy would also support efforts by governments to pay down debts incurred over the past year to cope with the Covid-19 virus, said the Paris-based thinktank, which advises 36 mainly richer countries, including the UK.

 

https://www.theguardian.com/business/2021/may/11/oecd-higher-inheritance-tax-covid-pandemic

 

“There is evidence that the share of inheritances in private wealth is returning to the highs seen at the turn of the 20th century in some countries. If these trends continue, inherited wealth may once again reach the high levels of the early 1900s,” the report said.

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95% of inheritances never pay IHT, but any talk of raising it is met by howls of protest as if you asked for carnal knowledge of peoples spouses.

People inheriting wealth never worked for it or earned it - that was done before them.  Any true capitalist would see that as a prime target to tax

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11 hours ago, PeanutButter said:

Inheritance tax should become a larger slice of government tax revenue after the pandemic, according to a report by the Organisation for Economic Cooperation and Development (OECD) that warns wealth inequality will rise over the next decade unless death duties also increase.

A more robust tax on inheritances that prevents the use of avoidance measures by the super-wealthy would also support efforts by governments to pay down debts incurred over the past year to cope with the Covid-19 virus, said the Paris-based thinktank, which advises 36 mainly richer countries, including the UK.

 

https://www.theguardian.com/business/2021/may/11/oecd-higher-inheritance-tax-covid-pandemic

 

“There is evidence that the share of inheritances in private wealth is returning to the highs seen at the turn of the 20th century in some countries. If these trends continue, inherited wealth may once again reach the high levels of the early 1900s,” the report said.

Tax spongers call for more tax.

Maybe they could spend less.

Actual austerity

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11 hours ago, msi said:

95% of inheritances never pay IHT, but any talk of raising it is met by howls of protest as if you asked for carnal knowledge of peoples spouses.

People inheriting wealth never worked for it or earned it - that was done before them.  Any true capitalist would see that as a prime target to tax

Agree 100%. Insane that someone can inherit a £1M for doing sweet FA and pay a lower marginal tax rate than someone working their bum off to earn £110K!

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13 minutes ago, Unmoderated said:

Agree 100%. Insane that someone can inherit a £1M for doing sweet FA and pay a lower marginal tax rate than someone working their bum off to earn £110K!

And then the poor sod in your tale saves up his cash to provide his kids with a good life rather than blowing it on fags and hookers and gets hit with your commie rat-****** envy tax.

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12 minutes ago, Locke said:

And then the poor sod in your tale saves up his cash to provide his kids with a good life rather than blowing it on fags and hookers and gets hit with your commie rat-****** envy tax.

I'm sick of these useless millionaires envious about how much I earn and having me taxed. See how that's a retarded rhetoric?

ALL taxes take place at a transfer of value. The whole 'it's being paid out of taxed income' is horsesh!t and you know it! Certainly in the UK most inheritance is made up of insane property valuations that are tax free AND unearned. 

Most people I know who inherit run off to buy a BTL LOL. 

Lower income taxes, add any inheritance in that year to the income tax calculation.

You get people pleading in the Guardian about inhering a property and then having to pay the tax but they don't want to the sell the house do they... the question they ask is should I get a mortgage or elect to pay the tax in instalments while I rent the place out. 

FFS lol. 

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11 minutes ago, hurlerontheditch said:

much reform needed. there should be a tax. free amount of 300k and anything above that taxed

That's not really a reform, that's virtually the UK right now lol. 

How about giving all inheritees a tax free inheritance allowance of £100K. This way families with lots of kids don't pay as much as the single child inherent the whole lot. Seems reasonable, would raise more money AND impact far fewer people making it politically acceptable. 

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37 minutes ago, Unmoderated said:

That's not really a reform, that's virtually the UK right now lol. 

How about giving all inheritees a tax free inheritance allowance of £100K. This way families with lots of kids don't pay as much as the single child inherent the whole lot. Seems reasonable, would raise more money AND impact far fewer people making it politically acceptable. 

At first glance that's a good suggestion. However, the more complicated a tax system becomes, the easier it is to game it with all sorts of legal devices.

I'd much prefer a simple flat rate that got applied universally with no allowances. Everyone would have skin in the game and would be incentivised to vote. Every extra pound earned would return the same net amount thus reducing the absurd case where increasing rates act as a disincentive to effort.

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Changing the inheritance tax % and threshold is pretty much redundant as most people will transfer most of their wealth before they die thus escaping any inheritance tax. I’m not 

If we are to get serious about the debt and deficit, we need to have a one off wealth tax that generates hundreds of billions in tax revenues. I don't think we have the political will to pull this off though.

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31 minutes ago, micawber said:

At first glance that's a good suggestion. However, the more complicated a tax system becomes, the easier it is to game it with all sorts of legal devices.

I'd much prefer a simple flat rate that got applied universally with no allowances. Everyone would have skin in the game and would be incentivised to vote. Every extra pound earned would return the same net amount thus reducing the absurd case where increasing rates act as a disincentive to effort.

imho this simplifies it. Treat all income as just that, income. Gifts, capital appreciation, profits, inheritance and earnings. 

Pure insanity that some can cruise by life gaming the system knowing they'll inherit a million in their forties while many people working far harder will never get there. 

I have a friend who had a wreck of a house bought for him, fair enough he used his savings to renovate it (money saved while living at home for free and doing odd jobs here and there). Now sits there claiming his grants (which aren't enough to live on btw because it's based on declared income for tax purposes rather than actual earnings). 

It isn't jealousy, it's juts about fairness. I'm lucky, I bought a house and I earn good money but as things are right now my plan was and remains to get into a position where I make enough money on this house (tax free) and then do another one or two (tax free) and then get myself into a position where I'm paying very little tax either by working less or making fat pension contributions. 

Anyway, if the Tories want to level up they can start with unearned income/wealth transfers. 

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3 hours ago, Locke said:

And then the poor sod in your tale saves up his cash to provide his kids with a good life rather than blowing it on fags and hookers and gets hit with your commie rat-****** envy tax.

Agree - I work hard to provide for my family 

1 hour ago, Unmoderated said:

It isn't jealousy, it's juts about fairness.

It is pure envy and nothing else

I think if anyone gets a big inheritance good luck to them, it does not have any adverse affect on my own life.

What is fair that if a person gets of their backside and works and shows their kids a work ethic and that is the way to get on in life that their hard works goes to their own family

3 hours ago, Unmoderated said:

This way families with lots of kids don't pay as much as the single child inherent the whole lot.

No 

It would encourage people to have kids in world where we have a housing shortage and a drain on resources.

Most families with loads of kids are in council houses anyway.

 

 

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3 hours ago, Unmoderated said:

That's not really a reform, that's virtually the UK right now lol. 

How about giving all inheritees a tax free inheritance allowance of £100K. This way families with lots of kids don't pay as much as the single child inherent the whole lot. Seems reasonable, would raise more money AND impact far fewer people making it politically acceptable. 

300k all in.. no increasing to 500k if you transfer house to kids etc

 

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I will do everything I can to ensure my children receive ALL of what I leave. The thought of the state stealing half or more makes me feel ill. My plan is to retire to a tax haven.

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1 minute ago, longgone said:

Abolish it.

Disgusting tax

They should make it easier to give it away......nobody needs money the day they die, what they need is their health so that they can live for longer.;)

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6 minutes ago, winkie said:

They should make it easier to give it away......nobody needs money the day they die, what they need is their health so that they can live for longer.;)

True

Or no tax alive but plenty on death if the majority is hpi.

Not both.

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6 hours ago, micawber said:

Over 100,000 state pensions have prematurely ended. I'd be (insensitively, I'll admit) curious as to know the value of these and the avoided future health care costs.

We've discussed this on here before.

173,000 Covid deaths out of 16 million pensioners is only about 1%.  You can argue about how many excess deaths there have been and how many years of life were lost, but it doesn't affect the conclusion that it is only single digits per cent saving.

However that small percentage should have an effect, because it still comes to billions over the years.  My favourite question is how much the pensions industry will be saving, and who is getting that money.  Because they all have models forecasting future outgoings, which have now been reduced by a per cent or few.

 

 

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36 minutes ago, doomed said:

I will do everything I can to ensure my children receive ALL of what I leave. The thought of the state stealing half or more makes me feel ill. My plan is to retire to a tax haven.

Go on, give us a breakdown of what you've accumulated. How much did you inherit? How much is unearned HPI? 

You live in a country that has allowed you to gather a massive hoard of wealth, not on an island populated solely by yourself. You live in a society. You have benefited from a safe, clean, educated, free, well-run society. And now you want to hive off to some tax avoidance scam land. :D What an absolutely wonderful lesson for your kids. Very Trumpy, much Philip Green vibes.

4 hours ago, Save me from the madness! said:

Only some lucky everyday people pay inheritance tax. The top few % of wealthy make use of legal ways of avoiding it that are too expensive / comolicated to setup for most people. 

I'd give the luck back in exchange for living parents. And there's nothing to say we can't crack down on UHNW tax avoidance at the same time. 

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3 hours ago, Sprrite said:

If we are to get serious about the debt and deficit, we need to have a one off wealth tax that generates hundreds of billions in tax revenues. I don't think we have the political will to pull this off though.

That'll be one big block of one-off money that'll be quickly spent and forgotten about, no different from all the stuff the government's sold off over the years, leaving us in the same situation but without all the government owned stuff. Any changes need to be ongoing and sustainable.

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39 minutes ago, longgone said:

Abolish it.

Disgusting tax

I think unearned property equity above inflation should be taxed after the owners are dead.  The proceeds to be ring-fenced for social care so that cost does not fall on the working young.

It's unfair that offspring of Londoners get to inherit millions, whilst Blackpudlians only get thousands.  This only feeds our gross regional inequality.

This also adjusts investment money away from property speculation and hopefully into more productive industries.

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