Taxation on inheritance and an odd choice of language… August 12, 2016Posted by WorldbyStorm in Uncategorized.
Here’s a report that should make people think about taxes on inheritance. Hugh Grosvenor, 25 years of age, has just inherited €10.5bn. But those who inherit such sums are usually free of the taxes paid by lesser folk.
…complex trusts which have allowed Britain’s wealthiest families preserve fortunes through generations by avoiding death duties.
It is thanks to a series of such trusts, dating as far back as 1953, that Hugh and his three sisters will avoid the 40 per cent levy families normally face on the death of parents.
“For people who are really wealthy, inheritance tax has become an optional choice,” John Christensen, director of the Tax Justice Network told the Guardian in the aftermath the duke’s £9 billion inheritance this week.
“If you are lucky to be born into a very wealthy family you will be untaxed. For most normal people this is extraordinary and unacceptable.”
Up to 40% is taxed in the UK. Here? Well part of the programme for government has the following:
Tax changes promised in the Government programme for partnership will sharply cut or eliminate completely inheritance tax for thousands of people in the coming years.
Under the changes, once they are implemented, children inheriting the family home will not pay tax on the first €500,000 value of the estate, which should mean the majority of bequests will not prompt tax demands.
I’m dubious about that to be honest. Inherited wealth (and inherited other aspects of life) are one of the major conveyer belts of privilege. €500,000 seems a pretty fantastic sum not to see any level of taxation on it. Currently the levels are €280,000 which is still a very significant sum. And by the by here’s an interesting column on just how elastic the limits currently are. And just to be clear there are mechanisms possible to avoid those for whom immediate tax liabilities were excessive and might cause hardship – for example repayment pauses until a property is sold on the market, etc.
Meanwhile that odd choice of language?
However, the new Duke of Westminster’s overnight transformation into a multibillionaire has not come without criticism and his illustrious story is tainted by widespread calls for an overhaul of the UK tax system that has allowed him to keep the entirety of his inheritance.