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He really never does grasp tax incidence, does he?

Inheritance tax is the only tax in the UK that is supposedly charged on wealth.

If reports from opinion pollsters are to be believed, it is also the most hated tax in the UK[1].

Paradoxically, inheritance tax is also one of the taxes that a person is least likely to pay in the UK. In the tax year 2020/21, which is the last for which reliable statistical data is available, just 3.73 per cent of all estates in the UK were subject to an inheritance tax charge

So, who pays inheritance tax? Whoever receives less money as a result of inheritance tax. Who is that? The people who inherit.

So the number of people who pay IHT is not the 4% of estates, it’s the number who inheirt from those estates. Which is a rather larger number, no?

16 thoughts on “He really never does grasp tax incidence, does he?”

  1. Bloke in North Dorset

    Upton Sinclair might have something to say about this, only instead wage he’d probably substitute grift.

  2. It’s about 8% of beneficiaries. It would have grown considerably had the extra £175,000 nil rate band for property not been introduced. However as that isolate most estates from the impact of rising house prices it’s a very small proportion of the electorate going though it at anyone time so it’s not going to win or lose many votes. Those that are hit with it hate it. To make matters worse IHT generally needs to be paid before probate is granted, and perversely the grant probate is required to sell the deceased’s property and withdraw the funds from the bank needed to pay the tax. These complications make it a wonderful earner for the legal possession who not unsurprisingly would like to impose a low threshold on the amount of funds banks can release to an executor without a Grant of Probate.

  3. It is indeed about 4% of estates, and it is indeed the estate that pays the tax. And it is indeed on average two beneficiers per estate, so it is indeed about 8% of beneficiaries who receive the residual of the estate that has had tax taken off it.

  4. forget the potato not understanding tax incidence , he doesn’t understand that most people (apart from the demented commentators on his blog) are not fond of paying taxes. Those that advocate raising taxes , advocate taxes being raised on someone else – not them. He can bleat all he wants about raising taxes to fund public services such as the nhs, but anyone whose had the misfortune to deal with the nhs (ie me) in hospital, know the problem is not lack of money but sheer fucking incompetence and buck passing when things go wrong. The same with education. As for HMRC it couldn’t organise a piss up in a brewery. It would appear that the main function of hmrc management is to demoralise staff and fuck up working practices that work well in favour of the latest flavour of the month. A pox on them and the potato.

  5. Take a look at the IHT stats and you will see that there is very little tax coming from those with more than a few million. IHT is a tax on the moderately wealthy. The really rich instead spend millions on lawyers accountants etc to avoid it.

  6. I’m not convinced by the average 2 beneficiaries from estates that pay IHT.
    Nominate an institution to inherit, Baitul Futuh Mosque (10,000+), National Trust (5m+ members).
    And I’m betting those 2 beneficiaries are likely to be 2 households for practical purposes with children and grand children
    I like AndyF’s point about the legal profession benefitting from it existing. Abolition of IHT would mean more law for everybody else, for a fixed amount of law.

  7. Doesn’t inheritance tax really hit agriculture?
    Either a) farms are hit by causing problems to succession
    b) they are not so rich people buy farms to avoid it causing agricultural land to be artificially inflated.
    We have b

  8. OT – can we ask President Putin, or Premier Xi to send us some foreign aid?

    Anatoly Popov, deputy chairman of the board of Russia’s largest lender, Sber, was speaking at the Russian Energy Week forum in Moscow.

    “Electricity is cheap in Russia. If you take the price in Russia and the price that British industries pay, I do not know if there is any industry left with such prices, but the price is almost ten times lower in Russia than in the UK. In the EU, the prices for industrial consumers are four times higher per kilowatt/hour, and for households also 4-4.5 times higher,” Popov explained.

    According to the British government website, floor unit prices for electricity for households averaged £0.34 ($0.41) per kWh over the past year. Russian consumers pay on average $0.04 per kWh.

    Those Russians and Chinese are going to feel pretty silly when defeat them by ensuring they are richer and have more of everything than we do.

  9. Steve. Just about all the news I’ve read is shrieking for US to give THEM foreign aid.

    I was especially entertained when they wanted us to give lots of loot to Gaza. So the damn war would drag on and on and on.

  10. Things must be much better in Russia, so good that everyone with a few quid has fucked off to Dubai and Thailand, just to create a bit of room for underprivileged Europeans.

    And I’m sure the 600 million people in China with monthly income of only £110 (source: Premier Li Keqiang) are laughing their socks off at their good fortune not to have been born in Europe.

  11. Bboy – I thought it was instructive that, despise Gaza voting for Hamas and its “murder the Jews” policy, and the people of Gaza acting on that, and the ten thousandth time we’ve seen dancing Moslems celebrating the most disgusting and evil things you’ve ever heard of, the EU is somehow unable to stop sending money to Islamic terrorists.

    MC – Things must be much better in Russia, so good that everyone with a few quid has fucked off to Dubai and Thailand, just to create a bit of room for underprivileged Europeans.

    And I’m sure the 600 million people in China with monthly income of only £110 (source: Premier Li Keqiang) are laughing their socks off at their good fortune not to have been born in Europe.

    Nah. That’s cope.

    We don’t need cope, we need cheap energy and lower taxes.

    Russians and Chinamen will be driving around in their cheap petrol cars and turning on their lovely central heating with their happy families while British people shiver in the dark and eat fly paste while hoping they don’t get stabbed by migrants on the electric bus to their nightshift in the Amazon warehouse.

    That’s what losing looks like, comrade.

    мне жаль 🙁

  12. I’m not really sure what ‘cope’ is, but it sounds better than cry-wanking over totalitarian dumps and backwards kleptocracies.

  13. Cope is cry-wanking over how you hope Johnny Foreigner has it even worse, while you watch your own country collapse into being a disgusting poor shithole.

    Winners don’t cope, they eat red meat and fire up the oil boiler.

    Hope that helps x

  14. It occurs. One can regard IHT as being the same as value. Both are opinions of an anticipated future. People are concerned about the value of their house. But only a tiny percentage are actively in the process of selling. Doesn’t mean it’s not important to the rest..

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