21 Feb 2015, 12:42pm

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  • IHT

    Inheritance Tax

    buy land, they’re not making it any more – Mark Twain

    I’m going to make an exception to trying to be value-neutral in the glossary because dynastic wealth is an abomination in a democracy in my view and it gets my goat enough.

    A tax on estates larger than about half a million pounds or thereabouts. This makes the rich very, very sore, they harp on about death taxes and bitch and moan and whine about it. According to this Parliamentary note, only about 6% of UK estates paid IHT, this was at the high-water mark of the housing market before the GFC and before Labour had shifted the rules to increase the IHT threshold for a married couple over £500,000. It’s not a problem for the vast majority of Brits, and yet the rich pay their newspapers to harry us and make us believe it is a widespread problem. 1

    It may be because I am child-free but I don’t get the keening noise about inheritance tax. By definition you are past caring – your spouse is not subject to IHT. Of course you want to featherbed your kids, I get that. Hell, you can buy them a house usually with the current IHT limits. But if you want to create a dynasty that will end up owning all of Britain, well I have news for you. Firstly, we never got rid of the old aristocracy that was endowed in the Norman Conquest and owns half of Britain

    More than a third of land is still in the hands of aristocrats and traditional landed gentry. Indeed, the 36,000 members of the CLA own about 50% of the rural land in England and Wales.

    Country Life magazine, 2010

    We know more than a third is owned by the aristocracy because the cadastral records in Britain such as they are 2 doesn’t record their holdings, and it is short by that much 😉 Unlike income tax, capital gains tax, land tax etc you get to enjoy the fruit of your labours free of it. It is only your greedy and lazy children who have to pay it, not you, and they didn’t work for it. It might even be good for them – ever hears from clogs to to clogs|rags to riches| in three generations? Why should they enjoy 100% of the ancestral wealth they haven’t earned, perpetuating dominion over their fellow human beings? It’s perfectly understandable that you want to favour the fruit of your loins. And if you are rich enough, there are no end of douchebags who will help you hide your ancestral pile from the taxman.

    The single biggest scam is agricultural land – when the reforming postwar Labour governments started to tax inheritance as a quid pro quo for the proletariat dying like flies on the battlefields to defend King and country the aristocracy wheedled a loophole. “You wouldn’t want to break up the family farms now would you – surely the yeoman farmer should be able to pass on his horny-handed work to his son”

    So the aristocracy owns huge estates, and contract out the grubby work of farming to contract farming companies, because they were lying shitbags about the yeoman farmers. They don’t have to turn  real return on capital, merely enough to cover costs and transmit the wealth inheritance-tax-free to their spawn, which incidentally is one factor making land dear in the UK. The contract farmers have to sweat the asset and drench the land with chemicals and monoculture, they get paid shitloads of EU subsides paid for by the rest of us and kill our birds too. It’s a lose-lose situation for everybody but the aristocracy, who get to hide their ancestral wealth in plain sight – agricultural land with no IHT. As the FT relates, the nouveau riche are buying into farmland, because, well, they also want to create tax-free dynastic wealth.

    The old goat George Monbiot gives it to the landed gentry with both barrels asking why we tolerate this scam with agricultural land and IHT and then takes the battle to the enemy at the Oxford Farming Conference asking them what the hell the 96% of us who don’t farm get from subsidising big farmers to the tune of £245 per household.

    IHT is not a death tax and you never pay it. If you don’t want your children to pay it then give them your Stuff seven years before you die. You obviously brought them up to be fine upstanding citizens so they won’t piss it all away. Even if they do, that’s what they would have done after you’re gone 😉

    tl;dr

    You cannae take it with you, bud

    clogs to riches to clogs in three generations

    Notes:

    1. I am coarsely summarising the situation, but really, if you are rich enough to be bothered by IHT and researching it from an Ermine you need to get your priorities right and get financial advice ASAP. The rest of you are too poor to care and should be all for IHT because otherwise your kids are going to be the serfs in the New Aristocracy
    2. in other European countries that weren’t suborned by an existing aristocracy that preferred to keep schtum about the extent of their untaxed dynastic wealth, the cadastral records, the equivalent of our toothless Land Registry, records the ownership of all land and is available for public inspection. Go to any mairie/office de impots in France and book an appointment to see the full land ownership records for their area. Our aristocracy derives from the Norman Conquest, which was perpetrated by Frenchmen I believe 😉
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