Gordo's insidius reach (oh, did I spell that right?:)

[threaded]

The great con is tax to pay for public services.

HTH

[VectraMan]

The problem is, you arent taxing the dead...you ARE taxing the living by getting a cut of the assets they have just inhereted (and most likely at some stage during their lives helped to create).

Not if you do away with inheritance. Then you're only taxing the dead.

Inheritance isn't money that's earned, isn't money that's owed, and it isn't money that is expected (at least it can't be predicted accurately when somebody dies). You hear people say they've been "hit" by IHT, but nobody is hit by IHT anymore than a lottery winner is hit by winning less than the full jackpot.

And how many children contribute to their parents' wealth? Usually they're a drain on the parents wealth for the first 25 years, and then they become independant. If anything, the children should be paying back the parents.

I'm not talking about the Bransons of this world either, just the regular people who when they die their children get a big share of the £300K that their house is worth (which also adds to the out of control house price situation).

Put it this way, if you were given an option now that meant you could halve your tax bill for the rest of your life but all your money and assets would become the government's on your death (basically defering tax until after death), how many people would take it? I think I probably would.

[John Galt]

Is this that same Stowe educated Richard Branson rags to riches bulltulip? Yeah, lots of working class kids get the chance to go to Stowe don't they.

Do you think that he would not have made his fortune if he hadn't gone to Stowe then Threaded? Branson did badly at school as he is severly dyslexic. I think that you education has little to do with your success in later life - if you have no drive to be a success then even a first at Oxford will make no difference.

[threaded]

No, it is just this rags to riches story is bollox. He came from a rich family. If he had not had a rich family he would have gone to jail when he was younger. There are many many people with the drive to be successful, but they are held back by a legal system designed to hold them back.

[IR35 Avoider]

I only scanned the original post in this thread, and all the replies, very quickly, but unless I missed something, I think absolutely everyone has missed the point.

Up to now, when you died after buying your pension annuity, 100% of the money in your pension disappeared. Not to Gordon, but to subsidise the annuities of others who lived longer than expected. (If you lived longer than average you would benefit from the "losses" of others who died early, so this is only fair.)

There is a change from next year meaning that you don't have to buy an annuity at 75. This is apparently to cater for some people whose religious beliefs don't allow them to profit from someone elses death. Instead of buying an annuity you can effectively keep on living off your own pot of money.

Some advisors thought that the ability to avoid buying an annuity combined with the ability for you and your family to be part of the same pension fund might mean that when one person died, their funds could automatically switch to supporting the pensions of the other family members. Gordon has said this will not be allowed without inheritance tax being charged.

Note that it is currently already possible to inherit the remainder of a parents pension fund, if they die during the income drawdown period between retiring and buying their annuity. Any fund they leave forms part of their estate and is subject to inheritance tax.

Gordon making funds left on death after the cut-off age for buying an annuity subject to inheritance tax is entirely consistent with what currently happens for funds left on death before that age.

In other words, the inheritance tax position of pension funds is exactly as it always was. Anything left is subject to inheritance tax. All he is saying is that he is not allowing a new loophole to be created.

[John Galt]

No, it is just this rags to riches story is bollox. He came from a rich family. If he had not had a rich family he would have gone to jail when he was younger. There are many many people with the drive to be successful, but they are held back by a legal system designed to hold them back.

I agree, Branson did have a relatively comfortable upbringing but I don't think he stayed out of jail because of his family and he nearly went bankrupt several times and only his drive and ambition and will to succeed prevented it. What do you mean by the 'legal system'?

[threaded]

I agree, Branson did have a relatively comfortable upbringing but I don't think he stayed out of jail because of his family and he nearly went bankrupt several times and only his drive and ambition and will to succeed prevented it. What do you mean by the 'legal system'?

Suggest you do a bit of research into your hero. If it wasn't for his parents coughing up several hundred thousand overnight for the VAT man then he wouldn't be where he is today, I feel quite sure of that. That is also what I mean by the legal system preventing others from a lesser social status achieving the same: i.e. without the rich parents they get chopped off at the knees as soon as they make the first mistake.

[John Galt]

Suggest you do a bit of research into your hero. If it wasn't for his parents coughing up several hundred thousand overnight for the VAT man then he wouldn't be where he is today, I feel quite sure of that. That is also what I mean by the legal system preventing others from a lesser social status achieving the same: i.e. without the rich parents they get chopped off at the knees as soon as they make the first mistake.

He is no hero but I admire his ideas and his way of working. Cannot agree with the rich parents thing - he didn't make a mistake - he didn't pay the import duty on records he was bringing in from Europe. That was his choice and he should have taken the rap for it because he broke the law. However, I refuse to accept that those that make genuine mistakes are penalised if they don't have rich parents. I believe that people make their own opportunites.

[expat]

I only scanned the original post in this thread, and all the replies, very quickly, but unless I missed something, I think absolutely everyone has missed the point.

Up to now, when you died after buying your pension annuity, 100% of the money in your pension disappeared
....
In other words, the inheritance tax position of pension funds is exactly as it always was. Anything left is subject to inheritance tax. All he is saying is that he is not allowing a new loophole to be created.

Damn right. Everybody did miss it. Something that never was able to be passed on to heirs now will be, and Brown is merely declaring that this inherited money will be treated as inheritance and therefore subject to IHT.

You may or may not like IHT, Gordon Brown, Labour, taxes, government, etc... but it's not the case that Brown is here doing anything new, to people alive or dead.

[threaded]

That is my point, the legal system allowed him to escape prosecution and continue in business, whereas people without the rich parents would be meeting bubba.

So, in other terms, the chap without the rich parents would not have taken the risk of fiddling the VAT and hence would not have had the opportunity to create a large profit to plough into other businesses.

i.e. the legal system holds those of a lower social class back.