Tuesday, October 09, 2007

Labour's Big Inheritance Tax Con!

It is not just me who has spotted this.

The "tax break" such as it is applies only to married couples or civil partnerships.

The situation is this, if you die without a will, the estate gets divied up, so much to the spouse, up to £125,000 if I remember correctly and then so much to children etc.

If the value of the estate is high, then there is an inheritance tax bill.

However, most people in this position take out a will, and if the intent is to pass it to the spouse that is tax free.

So there is no tax giveaway in any practical sense at all.

Fraser Nelson has this on the Spectator Coffee House Blog, linking to this more technical explanation by KPMG here.

Hat tip to ChrisD on politicalbetting.com for the link.


Anonymous said...

Each person has a £300,000 IHT nil rate band. you can structure your wills before or even after death so as to leave £600,000 IHT free to your dependents.

It is possible to use both Nil Rate bands (£600,000) even if your husband/wife/partner has died in the last 2 years using a deed of variation.

So it only benefits married/civil partnerships whose other half has died more than 2 years ago. It also stops the need to consult a solicitor to draw up these wills saving around £500.

Gracchi said...

Interesting point, thanks Benedict and anon for elucidating that.

Anonymous said...


The General Register Office in England and Wales is to join the Identity and Passport Service, enabling the link up of identity cards, passports and life event information

Responsibility for overseeing the recording of births, marriages, civil partnerships and deaths in England and Wales will transfer from the Office for National Statistics (ONS) to the Identity and Passport Service from 1 April 2008.

This coincides with a new status for the ONS, which will become independent of ministers in April. The IPS is an executive agency of the Home Office.

The GRO currently provides IPS with information to prevent fraud from passport applications. According to the Home Office, this data sharing has led to the prevention and prosecution of individuals who have hijacked dead children's identities.

Work is also under way to provide the IPS with online access to GRO birth, marriage and death registers, and the equivalents in Scotland and Northern Ireland. This was made legal in July via section 38 of the National Identity Cards Act.

Announcing the move on 9 October 2007, Home Office minister Meg Hillier said: "The IPS and the GRO for England and Wales are already working closely together.

"In order to take this work a step further and fully realise the benefits of combining registration of life events in England and Wales and the issuing of passports, it is sensible that the IPS and GRO should be part of the same organisation."

The GRO's main functions include:

* support and inspection of 285 local authority owned and run registry offices;
* oversight of registration of births, marriages, civil partnerships and deaths, as carried out at these offices;
* handling of some registrations centrally, and maintenance of a central record of registration data;
* implementation of and advice on legislation which will effect the delivery of civil registration; and
* the selling of copies of certificates.

"Working as one organisation will allow us to explore the possibility of integrating passport, identity card and life event registration processes," said IPS chief executive James Hall. "This would reduce red tape and make life easier for people, as well as strengthen the integrity of our systems."

GRO Scotland and GRO Northern Ireland will remain the responsibility of the devolved administrations.
Given the error rate in the DNA database (nearly 20pct), you've got to wonder how long before people wanting government services are declared dead, and removed from the systems.
Jackboots are coming, to your front door.
1937 and counting.

Anonymous said...

In a free society, the rights and laws protect the individual from the government.

In a dictatorship, the rights and laws protect the government from the people.

The more corrupt the state, the more numerous the laws. - Tacitu