Is there any country that has no CGT and also no IHT?
Having found such an example, we should then ask if that country or canton/State/county if this is devolved is on balance a schithole.
If the answer is no, the place is not a schithole, then the UK should do likewise and nil both rates and the idea of exceptionalism on tax, that the UK knows better, can be consigned to wet dust like tears in the rain. Imv of course.
Isn’t the focus on “85% at death” a bit of a red herring?
What it highlights, by deeming previously unrealised gains to be realised at death, is the iniquity of the double impact on the same asset of both CGT and IHT.
But of course we already have that iniquity today, just with an interval between the crystallisation of a gain during the normal course of events during life followed by a further charge on the same asset, this time the entire thing rather than just the profit (mainly inflation) component.
The right course of action, assuming we can’t abolition both taxes, is to abolish IHT but make death a chargeable event for CGT purposes. Obviously at either a low rate in recognition of the impact of inflation or at the marginal income tax rate but with full indexation. That would mean that previously untaxed profits would fall into tax, including the unrealised profit on the family home, but the resented double tax impact on all other accumulated assets would be avoided.
Ah, no. Because what we do is charge IHT. Then say that clears all the CGT due. That's the "step up basis". Once IHT has been paid then the CGT slate is wiped clean and future CGT starts from the value in the estate. What is being suggested is that the CGT is charged and also IHT on the estate values.
What I am saying is that we should scrap IHT altogether but replace with CGT at death. That captures profits that have NOT previously been taxed, while avoiding taxing again those which have. Obviously the asset charged at death is rebased for the inheritor to its taxed value at death. Normal CGT rules would apply so there would be no rebasing, and no charge, when the asset is inherited by the surviving spouse, with the full tax from original base cost only crystallising on the death of the second spouse
Agree on both. It shouldn’t be both; that is what I described as “iniquitous”. My preference is CGT but no IHT since it only taxes new profits. IHT taxes everything including previously taxed profits.
No on is going to do any investing in anything anywhere near the UK, are they?
Is there any country that has no CGT and also no IHT?
Having found such an example, we should then ask if that country or canton/State/county if this is devolved is on balance a schithole.
If the answer is no, the place is not a schithole, then the UK should do likewise and nil both rates and the idea of exceptionalism on tax, that the UK knows better, can be consigned to wet dust like tears in the rain. Imv of course.
Isn’t the focus on “85% at death” a bit of a red herring?
What it highlights, by deeming previously unrealised gains to be realised at death, is the iniquity of the double impact on the same asset of both CGT and IHT.
But of course we already have that iniquity today, just with an interval between the crystallisation of a gain during the normal course of events during life followed by a further charge on the same asset, this time the entire thing rather than just the profit (mainly inflation) component.
The right course of action, assuming we can’t abolition both taxes, is to abolish IHT but make death a chargeable event for CGT purposes. Obviously at either a low rate in recognition of the impact of inflation or at the marginal income tax rate but with full indexation. That would mean that previously untaxed profits would fall into tax, including the unrealised profit on the family home, but the resented double tax impact on all other accumulated assets would be avoided.
Ah, no. Because what we do is charge IHT. Then say that clears all the CGT due. That's the "step up basis". Once IHT has been paid then the CGT slate is wiped clean and future CGT starts from the value in the estate. What is being suggested is that the CGT is charged and also IHT on the estate values.
I know that is what is being proposed!
What I am saying is that we should scrap IHT altogether but replace with CGT at death. That captures profits that have NOT previously been taxed, while avoiding taxing again those which have. Obviously the asset charged at death is rebased for the inheritor to its taxed value at death. Normal CGT rules would apply so there would be no rebasing, and no charge, when the asset is inherited by the surviving spouse, with the full tax from original base cost only crystallising on the death of the second spouse
Yes, sorta OK, Though we should have a large tax free allowance as with IHT. My point is that it's got to be one or the other, not both.
Agree on both. It shouldn’t be both; that is what I described as “iniquitous”. My preference is CGT but no IHT since it only taxes new profits. IHT taxes everything including previously taxed profits.