Tuesday, 12 February 2013

So why all the fuss then?


I would like it scrapped - inheritance tax, that is - but despite this the "it's a tax on aspiration" or "attack on the middle class" arguments appear not to hold much water:

Of the roughly 560,000 deaths in 2009-10, inheritance tax was paid on the estates of just 14,600 — or 2.6 per cent.

And tax was paid on just 4,700 estates worth between £325,000 and £500,000 — each of which paid about £27,000 on average. In fact, 68 per cent of inheritance tax receipts came from estates worth £1 million or more.

The 14,600 estates that did pay inheritance tax were, on average, worth £875,000 (including £329,000 in residential property, £253,000 in securities and £190,000 in cash) and paid, on average, £163,000 — an effective tax rate of just under 19 per cent.

Why make it a big deal?



Curmudgeon said...

If that's true, then little would be lost by raising the threshold to £1 million, then.

I would also expect that a lot that once would have been paid is now avoided by having made the allowance transferable between married couples (or civil partners).

The Thought Gang said...

A tax on aspiration?

People who's aspiration is to get fat off the efforts of their newly-dead parents cannot, as far as I'm concerned, be taxed enough.