This is one of the best discussions on inheritance tax I have read. Thank you John Burn-Murdoch.
John Burn Murdoch
With all the gloom about the future of Twitter, it’s easy to forget what a brilliant way a twitter thread is to tell a story. It’s not something I’ve mastered, but when I spot a great thread, I’m happy to copy it onto a blog- firstly because these threads need preservation and secondly because less of us are using Twitter as a source of information. This thread was highlighted by Jo Cumbo of the FT to whom I’m grateful!
Quick thread on inheritance tax:
Something that is massively under-discussed in this debate is how the “it’s unfair” argument is completely flipped on its head when you consider it from the perspective of the next generation instead of the person passing on the inheritance.
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
From the next generation’s perspective (which, as the people actually impacted, should surely be the key perspective), inheritance is staggeringly unjust.
There’s no just reason why I should get a bunch of money because of who my parents are and what they did with their lives.
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
And it also strikes me as deeply un-conservative to support a handout that disincentives hard work.
We know from research that receiving a large inheritance significantly increases the probability of taking early retirement https://t.co/AOoMzfjRig pic.twitter.com/Hky7BivBDJ
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
So in calling for inheritance tax to be scrapped, you’re saying “I want to make sure that the children of the wealthiest people in the country are able to receive a huge amount of unearned income without paying tax”https://t.co/wwlgk8Um8F pic.twitter.com/zDsYLG348S
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
(Oh and a footnote: the “it’s double taxation!” argument doesn’t work, because we’re double-taxed all the time. My salary is taxed, and then when I buy things I pay VAT out of that same money)
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
If I cared deeply about how tax & free money affect incentives, I’d probably put “sort out the insane marginal tax rates and VAT thresholds that disincentivise Britons from working” ahead of “the children of the very wealthy should get more free money”
See work from @danneidle: https://t.co/q1Zc65fNij pic.twitter.com/KzqQn73bF4
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
Adding this response from @sc_cath which makes some excellent points https://t.co/GxKaJ8Ky1F
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
And this is an interesting observation that I hadn’t thought about before. Britain’s Conservatives have definitely had a strong aspirational streak in the not too distant past, but certainly not nearly as much as in the US, and less so today than in the past https://t.co/Bf25R8Z6LE
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
And more food for thought here from @S_Stantcheva: https://t.co/FWdWLDgSRF
— John Burn-Murdoch (@jburnmurdoch) December 29, 2023
Thank you for sharing / thought provoking and challenged my previous view.
The perceived problem may be partly due to IFAs and others promoting their role to potentially profitable clients by raising the spectre of a large IHT charge. This may create the impression that IHT is an issue for more than the wealthiest segment of society and it is the responsibility of individuals to minimise the effect of the tax charge on their beneficiaries.
I find IFAs interest in all aspects of my financial affairs diminishes rapidly when I say I have no children or other close younger relatives and after ensuring my wife is looked after for the rest of her life, I intend to bequeath the bulk of my estate to charity. Yet I still receive glossy invitations from the same firms to their inheritance tax planning seminars.
And yet the revenue from IHT is staggeringly small. Under 1% of total tax take.
I often wonder if these people exist and bang their drum on behalf of government to just cause more social confusion and ultimately political apathy.
Or if these socialists believe that “this time it’ll all be better”