Irish inheritance taxes highest in the developed world

uhy.com/uk-imposes-highest-t … economies/

Mentioned in today’s telegraph that uk was second highest and we were the winner.

Of course with the 90% relief for farmers and awntrupeners some people do quite well out of our system.

Maintaining ridiculous land prices for farm land, making sure we have more farmers over 80 than under 35, another stupid policy to support a vocal minority of economic illiterates.

But inheritance taxes are surely one of the taxes most supported by capitalist ideology? The accumulation of intergenerational wealth means that those “lucky enough” to have it have a natural advantage over those who don’t, therefore it isn’t a level playing field in which all market entrants are equal. A more innovative, intelligent, entrepreneurial poor person has therefore much less chance of creating value than the silver spoon brigade?

Over time, you would therefore naturally expect to see an increase in the % of wealthy people whose origins are in acquired rather than created wealth. Which coincidentally is what we’re currently seeing.

Isn’t there some quote that it doesn’t matter whose at the table, as long as the people at the table keep changing?

Apart from the incentive problem caused by countering the drive to create inheritable wealth. If you really can’t take it with you, why bother working hard? (I don’t necessarily believe it myself, I’m just putting it out there)

Inherited wealth dissolves over a couple of generations, so it’s arguably a short term problem. The fact that you can see some families who’ve managed to keep the plate spinning longer is probably just survivor bias.

A big problem with punitive inheritance taxes, like all other form of taxes, is that they create strong incentives to avoid (Laffer etc).

I don’t think that logic plays any role in our inheritance taxes though. It’s just another unjustifiable and incoherent Irish policy mess. If the aim really was to discourage intergenerational wealth then why the reliefs for farmers and businesss owners, why the reliefs for inheriting a home that you live in with your parents (no matter what its value)?

Basically what I’d like to see is the same throughout the tax system - take out whole segments of the tax acts with all their tinkering and tax expenditures and loopholes that all the tax practitioners and sectional interests have lobbied for - cut all the reliefs and lower the rates for everyone.

Another conceptual point is that at the moment the gift and inheritance tax is based on each child having an allowance they can accept from their parents tax free. I don’t see the equity in this. The bigger the family and the more children… the inheritance is spread over the more children… the State loses out.

In the early Roman Republic most assets reverted to the State on death (apart from private villas, de family home).
A lot of wealth was bequeathed on individuals during their lives by the State, booty and plunder from military campaigns.
So it made sense that it reverted to the State on their death, so the State could incentivise a new generation in pursuit of the glory of Rome.

Historians argue the watering down of the inheritance laws diminished the fighting spirit of Rome.

I’m about four generations removed from real obnoxious wealth and I suppose I could be classed a working wage slave now.
Death Duties, Land Acts, feckless ancestors, fraternising with the plebs and prototypical 19th century equity release mortgages wiped out that legacy.
It wasn’t whittled away by large families as those generations between didn’t have too many offspring.

Dot be surprised to see this category of tax take increase over the next few years.

Dead people cant vote.

However its only the ordinary Joe or Mary Soap that are hit by the state taking a big slice of their savings or home when they die.

You wont see the same level of taxes applied to the relatives of farmers or business owners when they pass on

Note also that it’s not practical to simply move abroad to avoid IT either, the residence of the disponer is relevant.

Buying forestry is a good way to pass wealth on; farmland requires active participation

OT but I thought this was an interesting way to whittle away great wealth

independent.ie/irish-news/co … 70257.html

Lord Waterford leased land to Coillte for what turned out to be very little money - with inflation they were basically getting it for free - all they had to do was maintain the walls etc. Of course Coillte couldn’t be arsed doing that, so the aristo got a 3.7 million as a result.

Obviously the curse which according to local lore was applied to generations of the Marquesses of Waterford has finally ended then:
news.google.com/newspapers?nid=2 … 63,3174561

While this is undoubtedly true for many, there are oligarchichal families that manage through trusts their assets conservatively and well with the result that they are stateless, inheritance taxless, and sort of ownerless. Like the stateless corporations, I think stateless, anonymous trusts are a problem that need to be addressed.

Absolutely. Flatter taxes and flat tax-free allowances (to provide the progressiveness).

+1 to this too.

The title refers to an inheritance of 3m, the article points out for an inheritance of 350,000 we’re amongst the lowest in the world.
Also once your wealth goes past a certain level offspring will be inheriting most assets under the tax law of somewhere more comfortable than Ireland.

Of all the taxes inheritance is the one that bothers me least. More crippling and world leading is just about every other tax, VAT, income+USC+PRSI, DIRT, Pension levy etc…

How to build up an inheritance of 3m in the current tax climate is a bigger problem.

Tax planning for the wealthy. It’s not a relief for living with the auldies (this can actually jeopardise it). It’s a relief (strictly speaking an “exemption” IIRC) for inheriting or receiving as a gift a house you live in as your PPR. Relatively simple tactic - e.g. parent buys €1m house, “rents” to child for three years, transfers property to child. Child takes property exempt from CAT and keeps their threshold to use against other gifts.

Well who is paying the tax, the receiver or the gifter. I would say the receiver so why would you treat people differently based on the number of siblings.

It depends, I guess, whether you view inheritance tax as a tax on the estate or a tax on the gift. Most countries, I believe, tax the estate. Ireland taxes gifts, but has exceptions for inheritances.

I’ve already pointed out how inheritance tax can be avoided for ever, without any fancy trusts…

If/when we get gay marriage I’ll just need to persuade my wife to divorce me and marry my mother. Half of that conversation will be easy.

Or do like they do in Japan and get your mother to adopt your wife. If you’re comfortable with the pikey style relationship :smiley:

That’s probably a big part of why they list so many prohibiting relationships with respect to marriage:
citizensinformation.ie/en/bi … tml#l23f7d

includes not marrying your mother in law (though maybe post-divorce can work?)