Blah! to inheritance tax

After Cool Cat Cameron’s appearance on Phil and Fern last week inheritance tax is a big story in recent newspapers. As it is something that affects a lot of people in a huge way, thought I’d see what everyone thinks.

Call it what you want, inheritance tax (IHT), death tax, estate duty, it all amounts to the same thing. When you’re gone someone other than your family is getting your money and a lot of it!
When you die the executors or administrators of your estate are legally bound to assess your wealth and if your estate is worth more than £275,000 for tax year 06 and £285,000 for tax year 07 then it’s IHT time! (Well IHT time for anyone other than a member of the armed forces killed during service or due to wounds.)

We all pay taxes throughout our entire adult life. You work, you pay income tax; buy something, you pay VAT; buy a house, you pay stamp duty — tax, tax, tax, tax and more tax. But should we pay out when we die?

IHT is a crucial revenue-raiser for the Government. The Chancellor oh so very kindly increases the threshold every year with the rate of inflation of about 2-4%, but wait a minute, if savings growth is around 5% and property growth 10% surely our assets are increasing in value at a way higher rate than inflation. This means that over a period of time more and more people will be catching up with the threshold and therefore more people will be forced to pay out, it’s no longer just a tax for the uber rich.

To put it simply I’ll do a little sum:

Say your estate is worth a nice tidy sum of £500,000. This is £225,000 above the threshold and it is this that will be charged the massive 40% IHT. That is a huge £90,000 tax your estate will have to cough up!

Doe’s this seem reasonable to you. It does to Blair and Brown, Cameron on the other hand has told Phil and Fern that he wants to ‘have a look at it’ but what do you think. Is IHT a fair tax or another money grabbing opportunity for the government?

Blah! Party