September 03, 2007
Yes, the reason we have inheritance tax is to make sure that large fortunes are not handed down creating dynasties of inherited wealth.
Lord Forte, who made a multi-million pound fortune creating the Forte hotels group, left just £80,150 in his will, it emerged yesterday.
The self-made man passed on his money to his family before he died, aged 98, in February in order to avoid inheritance tax. He handed over the reigns of the company to his son, Sir Rocco, 62, seen here this weekend competing in the World Age Group Triathlon Championships in Germany.
Sir Rocco now runs his own chain of boutique hotels with his sister, Olga Polizzi. The Forte family, once owners of the world's largest chain of hotels and restaurants, is thought to be worth about £385 million.
Works so well, doesn't it? That must be why it is now levied on anyone with a 3 bed semi in the South of England.
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Well we don't know if it worked well or not from this, because don't the IHT rules include taxing attempts to pass over wealth to offspring while still alive, and taxing it? So did he have to pay tax when he did that?
And what, because the mind-bendingly rich still manage to pass their business empires on to their kids, you take from this that IHT doesn't work? Isn't that a bit of an unrealistic standard to set for it?
Tim adds: No tax paid if you give it 7 years before you die. And, given that the justification for inheritance tax is to stop the mind-bendingly rich from passing it all on, that it fails to do so seems to be a valid criticism, yes.
Posted by: Luis Enrique | Sep 3, 2007 9:20:25 AM
Inheritance tax (IHT) business property relief (BPR). Why do I never hear this being mentioned in the IHT debate? It exempts completely all large shareholdings in a trading company or holding company of trading companies (But not a company holding investments like shares etc.). As the super rich generally get so by founding (or inheriting) a company this principle source of their wealth is untaxed.
BPR is justified on the basis that the damage that can be done to the company (and therefore employment) is greater then the amount of tax that would be raised if it did not exist.
Posted by: Ari_P | Sep 3, 2007 9:39:27 AM
We could avoid problems like this by simply shooting rich people at random moments. Then they won't get a chance to plan a tax-efficient death.
Posted by: William McIlhagga | Sep 3, 2007 10:05:20 AM
Aye, an inheritance tax that exempts business holdings, farms and forestry - bright eh? Much wiser to exempt practically nothing and tax the lot at 10% - it would raise far more, give a negligible incentive to avoid it, and distort the economy far less. A win-win-win-win situation.
Posted by: dearieme | Sep 3, 2007 10:05:52 AM
Shooting anyone with over £50k would probably be easier, and it would alleviate the housing shortage and what's more the poor and under privilged would not be shot so we would have more of them which is obvioulsy want is required. Eventually everyone would be poor so no one would need to be shot anymore.
Posted by: Bob | Sep 3, 2007 4:53:09 PM
I think you've reinvented communism.
Posted by: AntiCitizenOne | Sep 3, 2007 5:45:22 PM
Shooting everyone with under £50k would make us richer, increase equality and reduce our carbon footprint. Why has no-one thought of this before?
Posted by: dearieme | Sep 3, 2007 11:42:48 PM
What is wrong with large fortunes? Except the spite of the socialist.
Most business's need a lot of money. Does it matter where it comes from?
Posted by: john cramer | Sep 4, 2007 6:36:51 AM
Excuse me? "He handed over the reigns of the company…" They've let the fucking work-experience boy sit in for the subs again, haven't they? O tempora, O mores! O shit!
And inheritance tax is the most godawful impost our Lords and Masters ever imposed on us. Contrary to popular belief, there are pockets in a shroud. They exist by the whim of HMRC, so that they be picked.
Posted by: David Gillies | Sep 4, 2007 7:10:38 AM
I heard today that the correct figure was £80m-some official had left some zeros off.
Never mind, it was a nice story.
Tim adds: Indeed, I saw that, but why spoil a great story with nasty things like facts?
Posted by: james C | Sep 5, 2007 10:15:00 AM