David Cameron
10 Apr 2016, 12:01am
Cameron in line to avoid inheritance tax of £80k
It’ll be extremely fun in fact. Because they’re all going to say that it is Cameron avoiding. But it isn’t, is it? It’s his mother’s estate which is avoiding. The tax is incident on that estate. We keep being told inheritance tax is on the estate, that’s the joy of it supposedly. Who better to tax than dead people?
The moment we all start shouting that it is Cameron avoiding then one of those justifications for inheritance tax itself disappears. Not that anyone’s going to be that consistent.
Yes although – if she dies within 7 years, and her estate can’t pay the tax due (because she gave everything away before she died), then the gift recipients, i.e. D.Cameron and his siblings, become personally liable.
JQ, indeed. And without any gifts involved, the estate recipients have to pay the tax before probate is granted, so it come out of their pockets, even if the estate when distributed covers that cost.
Has something interesting been reported yet? I can’t summon the energy to read the detail.
I didn’t know that inheritance tax planning was news. I think we all knew that it’s something of a preoccupation amongst the better off, and it doesn’t sit very well with hardworkingfamilies either.
What Cameron and Osborne have both got into massive PR blunders in recent weeks. It seems an inevitable result of worrying too much about PR.
Maybe this is the lesson to be learned.
I meant inheritance tax doesn’t sit very well with normal Brits, not inheritance tax planning.
The problem here………..is where in UK law, can you verify that these published figures are complete and truthful?
Mind you, his old Ma could have avoided IHT on her estate just as well by gifting the money to me rather than to her disagreeable son. Pity she didn’t.
Come to think of it, why on earth didn’t she gift the money to a lifetime trust set up for her son, his children, their children …..?
As things stand it looks likely that that £200k will attract IHT when Cameron snuffs it. Bad tax planning there, I’d say.
But as everybody knows inheritance tax is paid by the inheritor. It is in effect a tax on a capital gain or an income windfall, which is taxed for political reasons at a much lower rate than that paid by earners, and at the same rate independent of the size of the windfall.
Politics currently is hugely influenced by two factors:
* A lot of old folks living off capital want wages kept down the value of capital going up, deriving income from more rent.
* A lot of potential inheritors want the capital value of their inheritance to grow and not be liquidated over time.
As the number of middle class people with capital they own or they expect to inherit grows, their votes become important.
Where’s the tax avoidance? The gift is tax free (albeit with a partial clawback over the next 7years), but so what? Mrs Cameron is free to give her money away whenever and to whomsoever she likes.
OK, more IHT would eventually be due if she didn’t give it away but the same would be due if she shopped in Lidl instead of Waitrose. Tax avoidance is supposed to have occurred when artificial arrangements have a tax advantage compared to more normal arrangements with substantially similar consequences outside the tax effect. There is nothing extraordinary about making a gift to your children.
Eh? It never occurred to me incidence of Iht anywhere other than inheritors
Btw Mirrlees recommended taxing gifts
Luis Enrique, so if I gift my children money for their birthdays that should be taxed?
Luis… Taxing gifts? Surely you must remember the late, and not-in-the-least lamented CTT?
Pogo – no, I am too young, but googling I found the people who seem to be behind the Mirrlees recommendation writing about it:
http://www.ifs.org.uk/uploads/mirrleesreview/dimensions/wealth_transfers_apps.pdf