Inheritance

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Rorschach
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Inheritance

Postby Rorschach » 31 May 2021, 11:06

John Le Carre wrote:... we have to limit hugely the amount of inherited wealth anyone can receive.


Do you agree?

The way I see it, inheritance maintains inequality in society and makes a mockery of the idea of a meritocracy or people having equal chances in life. On the other hand, it's very human to want to pass something on to your kids and, while it strikes me that it would be logical to ban inheritance altogether, I wouldn't like it and pretty well no-one else would.
Also, there would be issues such as passing on family owned businesses, and turfing people out of their homes because their parents have died.

So what should we do if we want to create a more equal and fair society? Set a limit? What do you think the limit should be? Or should we carry on as we are?
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Re: Inheritance

Postby yomptepi » 31 May 2021, 12:13

I am looking forward to a small inheritance at some point. Being one of eight children, there was a limited amount to go around when my mother sadly died some three years ago. My mother in law is all we have left, and despite having total altzheimers and severe osteo porosis , we are told ahe has the constitution of a teenage athlete. I am happy she is comfortable, but I do wonder about her quality of life and if it fair that she is suffering so much. On the upside, she is a Jersey resident, so no inheritance tax!!!
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Re: Inheritance

Postby souphound » 31 May 2021, 13:23

An interesting question. I'e never really thought about it.

At first glance, I am all for inheritance. The concept keeps a lot of us in line, most times I would say. Not all. Hmmmmmm......
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Re: Inheritance

Postby souphound » 31 May 2021, 13:27

Another thought brings about the concept that inheritance (in my mind) includes more than physical assets. It includes values and an overall attitude in life. Again, not always though.
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Re: Inheritance

Postby Rorschach » 31 May 2021, 15:07

souphound wrote:Another thought brings about the concept that inheritance (in my mind) includes more than physical assets. It includes values and an overall attitude in life. Again, not always though.


Sure, but I'm talking specifically about financial or similar assets. The UK is still effectively run by the people who came over with William the Conqueror, because they've passed down the ownership of land through the generations. Until relatively recently primogeniture (which still applies in he royal family for example) meant that it all went to the eldest son so it didn't get divided up.
I don't think that situation is acceptable.
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Re: Inheritance

Postby souphound » 31 May 2021, 15:28

The tendency here is to split evenly between the children. Among "regular" families anyway, no clue what the rich and famous do.
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Re: Inheritance

Postby yomptepi » 31 May 2021, 16:21

There is a line of thinking which says that inheritance tax is unfair , because the tax has been paid on the amount once already. I know when my friends mother died she paid over £250,000 in tax, and she was bitter about it. Personally I think the current rules are fairish. The first £340,000 are tax free , plaus you allowance on top, and if one parent has left everything to the other previously, then you can double that. So you have to be in for large slab of money before inheritance tax is going to ruin your day.
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Re: Inheritance

Postby Rorschach » 31 May 2021, 17:46

yomptepi wrote:There is a line of thinking which says that inheritance tax is unfair , because the tax has been paid on the amount once already. I know when my friends mother died she paid over £250,000 in tax, and she was bitter about it. Personally I think the current rules are fairish. The first £340,000 are tax free , plus you allowance on top, and if one parent has left everything to the other previously, then you can double that. So you have to be in for large slab of money before inheritance tax is going to ruin your day.


If she paid that much tax then she must have inherited a huge amount. I have very little sympathy for her though I do understand that it would feel annoying.
In fact, that's what I'm talking about. Why should some people have such a huge advantage in life over others, just because their parents were successful? Or, in most cases, because an earlier generation got their hands on land or money.
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Re: Inheritance

Postby yomptepi » 31 May 2021, 18:49

Rorschach wrote:
yomptepi wrote:There is a line of thinking which says that inheritance tax is unfair , because the tax has been paid on the amount once already. I know when my friends mother died she paid over £250,000 in tax, and she was bitter about it. Personally I think the current rules are fairish. The first £340,000 are tax free , plus you allowance on top, and if one parent has left everything to the other previously, then you can double that. So you have to be in for large slab of money before inheritance tax is going to ruin your day.


If she paid that much tax then she must have inherited a huge amount. I have very little sympathy for her though I do understand that it would feel annoying.
In fact, that's what I'm talking about. Why should some people have such a huge advantage in life over others, just because their parents were successful? Or, in most cases, because an earlier generation got their hands on land or money.


Surely as a parent you want your kids to get a head start? I certainly haven't worked hard just to have all my ill gotten gains handed over to some corrupt official. That is my money. I have paid tax on it and if I want to give it to my children then it is only reasonable I should be allowed to. It isn't as if inheritance tax would be used for some kind of levelling up in society , is it?. No . It will be used for bombs and staff cars for politicians, for outrageous expense claims by self serving , do nothing party men. Why the fuck should my money line their pockets. Fuck them all. In fact I am so angry now I am going to put it all in an odffshore account so they don't get a penny. And I will make sure you get the blame.
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Re: Inheritance

Postby harvey k-tel » 31 May 2021, 18:59

:lol:
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Re: Inheritance

Postby mudshark » 31 May 2021, 19:07

I agree wholeheartedly with Rorschach. But I'm thinking that maybe this is because I never got one and never will. When my mother died a few years ago there was a few thousand euros left in her account but I gave it to my cousin who had sort of looked after her. Our family was very small and they're all brown bread now, except for that cousin. I think people who are likely to be the recipient of a large inheritance feel entitled. I think that's wrong but it's human nature. It's the same with state pensions. A good friend of mine, who is very rich, turned 67 recently and became entitled to receive a monthly state pension of Euro 1,850.00 or something like that. He can spend that amount every day for the next 10 years and he'll still be a millionaire. So I suggested that maybe he shouldn't take the pension so that people less fortunate than him could benefit from it. But it was his right, his money and he was going to take it. I'm not going to take it if I don't need it. But I'm weird that way. For some inexplicable reason the U.S. government sent me a cheque for US$2,500.00 during the pandemic. It must have been a mistake because my income is above the limit. I donated it to St. Jude's Children's hospital.
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Re: Inheritance

Postby mudshark » 31 May 2021, 19:15

But of course Yomp's got a point as well. And I too want what's best for my kids. But let's supposed that that I'm Jeff Bezos. It's not right that my kids receive all those millions when I'm gone. It would be fair if they receive a certain percentage and let the rest go to the greater good. I'm all for a fairer distribution of wealth.
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Re: Inheritance

Postby Robert » 31 May 2021, 21:55

Rorschach wrote:
John Le Carre wrote:... we have to limit hugely the amount of inherited wealth anyone can receive.


Do you agree?

The way I see it, inheritance maintains inequality in society and makes a mockery of the idea of a meritocracy or people having equal chances in life. On the other hand, it's very human to want to pass something on to your kids and, while it strikes me that it would be logical to ban inheritance altogether, I wouldn't like it and pretty well no-one else would.
Also, there would be issues such as passing on family owned businesses, and turfing people out of their homes because their parents have died.

So what should we do if we want to create a more equal and fair society? Set a limit? What do you think the limit should be? Or should we carry on as we are?


It’s simple really. Thomas Pickety wrote an extensive book about it some years ago.

A good start is to tax it the same way as income from labour.

An even better way is to limit inherentances to - I think it was € 100 K- and put the rest in a fund. I think Pickety argued that fund would be sufficient give ANYONE at 18 years old a headstart of around €50 K to pay for education or start a business.

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Re: Inheritance

Postby Robert » 31 May 2021, 21:57

BTW, the book’s called ‘Capital in the 21st Century’

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Re: Inheritance

Postby mudshark » 31 May 2021, 22:25

I have that book but it makes me sleepy.
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Re: Inheritance

Postby yomptepi » 31 May 2021, 22:47

Robert wrote:
Rorschach wrote:
John Le Carre wrote:... we have to limit hugely the amount of inherited wealth anyone can receive.


Do you agree?

The way I see it, inheritance maintains inequality in society and makes a mockery of the idea of a meritocracy or people having equal chances in life. On the other hand, it's very human to want to pass something on to your kids and, while it strikes me that it would be logical to ban inheritance altogether, I wouldn't like it and pretty well no-one else would.
Also, there would be issues such as passing on family owned businesses, and turfing people out of their homes because their parents have died.

So what should we do if we want to create a more equal and fair society? Set a limit? What do you think the limit should be? Or should we carry on as we are?


It’s simple really. Thomas Pickety wrote an extensive book about it some years ago.

A good start is to tax it the same way as income from labour.

An even better way is to limit inherentances to - I think it was € 100 K- and put the rest in a fund. I think Pickety argued that fund would be sufficient give ANYONE at 18 years old a headstart of around €50 K to pay for education or start a business.


In the UK you pay 40% tax after the first £340,000. But there are other allowances which stretch it a bit. As I say, I think that is fair. After all, it isn't even enough to buy a house in most places.
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Re: Inheritance

Postby Fonz » 01 Jun 2021, 08:05

As with most taxation matters, the people calling for higher rates of taxation (inheritance, or otherwise) are the people who would not be adversely affected.
Who decides what the inheritance tax threshold should be, and whether it’s fair or not, is a conundrum.
It’s not difficult to imagine scenarios of 3-4, or more, children getting a split of a nice legacy, that after tax has been reduced to (as Yomptepi says) an amount that might not be enough for a deposit on a house, or losing the family home to pay death duties etc
If the deceased has worked hard/got lucky/been a miser/whatever, why shouldn’t that good fortune be passed on? Leaving a nice legacy is a huge incentive for some people.
It’s another example of an ‘envy tax’. Some people simply don’t like to see other people gaining some sort of privilege, even if their parents have worked hard to provide it for them.

FWIW I will be lucky to inherit anything when my folks go, and I want them to spend every last penny.
But, I will probably leave my dependents a nice sum; money I have already been taxed on.

As far as pensions in the UK go: they should not be means-tested. They are not a ‘benefit’. One pays NI contributions through one’s working life to pay for them.
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Re: Inheritance

Postby Samoan » 01 Jun 2021, 08:46

Personal wealth can come in unbelievably awful ways.
I've written about this before but my cousin's husband was orphaned, along with his younger sister around the age of 10 years or younger. Their parents were killed outright when on board a new model of aeroplane which was about to make it's maiden flight.
The plane had taxied out but caught fire and exploded on the tarmac with no survivors. The designers/manufacturers/engineers were found to be at fault after investigation. Such a tragedy was extensively reported on in the media.

He and his sister were brought up by relatives. As well as inheriting whatever their parents may have owned, they both received a massive compensation payout from the airline company to reflect their age, the loss of their parents ((and their perceived future earning power)) and the children's consequent parlous situation which was put in trust for them.
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Re: Inheritance

Postby Geezee » 01 Jun 2021, 09:10

Fonz wrote:It’s another example of an ‘envy tax’. Some people simply don’t like to see other people gaining some sort of privilege, even if their parents have worked hard to provide it for them.


I think the definition of "worked hard" is very difficult to put into context here for the wealthy and very wealthy. I find it very hard to believe that most people who are wealthy have in any way worked harder than the majority of the population, both in terms of hours worked but also the labour, the societal good, and productivity involved. When I grew up I was shocked to hear that something like inheritance tax even existed - it just seemed to me obvious that whatever your parents "earned" should be automatically passed down. Over time I've completely swapped over on this issue as I've learnt more about the structural unfairness that this creates, although I do accept it's not a simple topic at all. But it's precisely that word "earn" that I find grates with me. My father worked very hard and was very good at it, but he ultimately had a very cushy job and had all the advantages in the world - which have subsequently been passed on to me, although I work nowhere nearly as hard as he. But I see very little that he ultimately "earned" in the context of a society and don't feel really much desire to inherit much from him beyond some personal items. But the equation completely flips when I look at my own children, and I want everything i have to go to them.
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Re: Inheritance

Postby robertff » 01 Jun 2021, 10:31

yomptepi wrote:
Robert wrote:
Rorschach wrote:
Do you agree?

The way I see it, inheritance maintains inequality in society and makes a mockery of the idea of a meritocracy or people having equal chances in life. On the other hand, it's very human to want to pass something on to your kids and, while it strikes me that it would be logical to ban inheritance altogether, I wouldn't like it and pretty well no-one else would.
Also, there would be issues such as passing on family owned businesses, and turfing people out of their homes because their parents have died.

So what should we do if we want to create a more equal and fair society? Set a limit? What do you think the limit should be? Or should we carry on as we are?


It’s simple really. Thomas Pickety wrote an extensive book about it some years ago.

A good start is to tax it the same way as income from labour.

An even better way is to limit inherentances to - I think it was € 100 K- and put the rest in a fund. I think Pickety argued that fund would be sufficient give ANYONE at 18 years old a headstart of around €50 K to pay for education or start a business.


In the UK you pay 40% tax after the first £340,000. But there are other allowances which stretch it a bit. As I say, I think that is fair. After all, it isn't even enough to buy a house in most places.



Not quite right my friend, the only reason I know this is because I have just completed probate and inheritance for my in laws.

The current limit is £325000 per person and if they own a house when they die the limit then increases by £175000 per person, so in fact in the case of a married couple your inheritance could actually reach £1000000 before any inheritance tax is required. The amounts also transfer to the remaining spouse if one dies before the other but the house must still be owned by them. If the house has been sold, say to pay for care home costs, you lose out and only the combined figure of £650000 is tax free. With a house, after the £1000000 everything is taxed at 40% in the £.

These things change very regularly however.


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