Sunday, March 29, 2009

Jade Goody Will Pay £1.8 million Inheritance Tax

I was listening to the latest edition of Donal Blaney's 15 minute Blogtalk Radio podcast this lunchtime (as you do). He made the very good point that Jade Good's case illustrates perfectly the case against Inheritance Tax. Jade did what any good parent would do and made every effort to provide for her children after she had gone. She built up a £4 million legacy. Except it isn't £4 million at all. Despite the fact that she paid her taxes along the way, the government will now claim a 40% share of her estate, leaving her kids with £2.2 million. OK, so that's far more than most kids would ever have, and nothing can replace the loss of a parent, but why should Jade be taxed twice?

Donal called our Prime Minister "Gordon the Grave Robber". I wouldn't quite go that far, but I know what he means.

55 comments:

Obnoxio The Clown said...

You wouldn't go that far? I would START much further along than that.

The man is an insane profligate thief with the moral rectitude of a stoat and the charm of a cheap crack whore. And that's the polite version.

IUnknown said...

I'd go even further than that... a rictus grin cannot hide the malice behind the individual that champions the weapon of fiscal drag upon a nation.

canvas said...

Just wondering, if the Tories raised the inheritance tax threshold to £1m how much tax would Jade's estate have to pay?

Even if the IT threshold was raised to £1m only 3,000 familes would benefit.

I think giving a tax break to people on low and middle incomes would be far more beneficial and helpful ...rather than worrying about 3,000 multi millionaires who can afford to pay their fair share anyway?

killemallletgodsortemout said...

SHE can't pay anything. She's dead, remember?

IUnknown said...

>> Even if the IT threshold was raised to £1m only 3,000 familes would benefit.

I've not seen that figure before - can you point me to some articles showing that?

I would have thought it would be more?

Patrick said...

No death taxes incurred between husband and wife...

That was the main point of them getting married (a week before she died) - to avoid a hefty IHT bill.

Yak40 said...

Maybe that could've been reduced by the use of trusts etc ? Of course she probably lacked the time to do much in that regard.

Inheritance tax is nothing more than a spiteful example of Labour's core belief: "What's yours is mine and what's mine's me own".

Inspector Morse said...
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Inspector Morse said...

1. As already noted, the deceased does not pay this. The heirs (and possibly assigns) do.

2. The Estate will have been nett of tax, so £4m will have started out as £6.7m -ish. After taking another £1.8m the total tax take on £6.7m will be circa £4.5m = 67%.

3. Is taking 2/3rds of recent income as tax excessive? Of course it is, but it is proportionate compared to low and middle income victims of early terminal cancer, who leave behind negligible inheritances, if not crippling credit card debts.

IMHO the Goody progeny will come out of this OK, in a cruel world during cruel times.

Pity the kids of the other young mothers who have recently died from Ca cervix and whose widowered fathers are jobless, or even non-present, leaving Gran and Grandad to pick up the pieces.

Bill Quango MP said...

Blair and Brown have always been the Burke and Hare of UK politics.

King Athelstan said...

You've got to love Donals way of saying exactly what He thinks. Frankly I think McBroon detests anybody that can stand on their own two feet, theres some bizarre chip on that shoulder of his.

(Of course I didn't enjoy his privileged upbringing.)

Michael said...

R U All Daft? You are saying it is okay for the Government to take Money she spent a lifetime earning through her labor, and mind, and she was paying FAIR taxes on this money the WHOLE TIME. She paid income, property, sales taxes on EVERY DIME. She dies, and leave an estate to children, and just because it is a lot of wealth you say it is fine that they have to sell it, pay off 1/4 to the government, and split the rest.

What?

Didn't the MILLIONS they took when she was alive satisfy these looters? No, they still want money from her when she dies.

OMG.

By WHAT RIGHT???

canvas said...

@ Michael: "By WHAT RIGHT???"

Her estate can afford it - her children are set for life. We should be more concerned with those who are struggling to make ends meet.

It is only a tiny percentage of the population who have an IT threshold problem. It's not a priority in a recession/depression.

Jimmy said...

"We should be more concerned with those who are struggling to make ends meet. "

Who's "we"? Remember this is a tory blog. You will soon have the option of sticking 5p on the top rate of income tax in order to double the Goody children's inheritance. As in all such things it is a question of priorities.

canvas said...

Jimmy. 'we' as in humanity.

A Tory blog? So what? You don't have to be a Tory to participate. I think Iain would like to think his blog is inclusive...

I don't belong to any political party in the UK. I'll vote according to the candidates and policies. In the USA I am a registered Democrat.

Melissa said...

Donal! Your skills as a tax lawyer are fading... This is why Jade got married, no? There is no tax as the estate passes from wife to husband, and the money is all in trust for the kids...

The Penguin said...

Canvas,

You're all heart, aren't you?

Obo, that's insulting stoats, who are clean-living creatures who tell no lies and steal no pensions.

The Penguin

Jonny Wright said...

I can see why you think 40% IHT is excessive, and there may well be some good arguments in favour of reducing it, scrapping it, raising the threshold, or whatever.

But the argument that "you've already paid tax on your income once; why should your estate pay it again when you die?" isn't a very compelling one, I don't think. We already get taxed twice: income tax on our earnings, and then VAT whenever we buy things! If you think double taxation is wrong in principle, they why not have a policy of scrapping VAT?

I reckon your opposition to the current IHT system must be based on a question of degree/extent, rather than a point of principle.

Iain Dale said...

Inspector Morse, you clearly know nothing about this. Her estate is reported as £4 million, on which IHT is paid.

Melissa, I read that her husband didn't figure in the will and that it was all left to the kids.

DespairingLiberal said...

It's a common fallacy that inheritance tax is a tax "paid twice". Of course it isn't. It's an estate tax on the heirs. Therefore the person who accumulated the wealth, being dead, is not taxed twice, only once.

For a good illustration of the rot that sets in with low inheritance taxes, read any of F Scott Fitzgerald's novels of the degenerate US trustfunder class of the 1930s.

canvas said...

My nail technician has an 'inside source' and she says that Jack Tweed apparently was offered the 'family home' but declined the offer. He was left some money.

The majority of her money is (apparently) in trust for the children - but certain people will benefit. Anyway, the details will be in the public domain soon so specualtion will continue until then...

Is any of our business anyway? I'm guilty of gossip.

trevorsden said...

Mr Dale just beat me to it -

- Her hubby gets nothing, he is not the father of her children. They get her estate and they will pay tax. Only if you make gifts 7 years before you die and some how split your house between spouses can you mitigate it and Brown / Darling are on the case with that last one.

She was on course to donate even more money had her career not nosedived.
Talk about donating organs - given the money the bastards take off you when you die I think thats a bit cheeky.

For most of us IHT will be the house. the govt mismanage the economy - inflation boosts house prices and they cream of money for nothing when you die. THATS the crime. And why - if you do sell the house to pay the taxes then the govt get 6% stamp duty on the sale.

Anyone who thought our money was our own is living in dreamland. And if Gordon does not have any money - he just borrows it, leaving us to pay it off later.
A neat trick - but maybe he has been rumbled at last.

Yak40 said...

Her estate can afford it - her children are set for life. We should be more concerned with those who are struggling to make ends meet.


So she's saved and set up her kids OK, quite creditable of her.

We should be more concerned with those who are struggling to make ends meet.
Maybe, but that's irrelevant to the question of IHT, one's savings should not be the object of government theft.

Like I said, the politics of envy and typical Labour class warfare garbage they trot out as a distraction when needed.

IHT rate should be 0%

Sobers said...

Mark Wadsworth has some insights here:

http://markwadsworth.blogspot.com/2009/03/jade-goody-inheritance-tax-planning.html

If she had had good advice it is entirely possible she could have avoided any IHT on her estate entirely. Maybe she did. To have anmassed £4m in her short period in the limelight shows either considerable business acumen (unlikely I would have thought) or very good advisors.

Given the time she had available from diagnosis to the end, it would have been easy to arrange her affairs in the most tax efficient manner.

Blue Eyes said...

Iain have you only just noticed that Inheritance Tax exists? Or did you need Jade to remind you?

Jonny Wright said...

Yak40 - "Maybe, but that's irrelevant to the question of IHT, one's savings should not be the object of government theft."

Not necessarily - as others have pointed out, if you wanted to fund a policy of scrapping IHT, you'd have to find the money by raising taxation elsewhere, or by cutting spending on public services, both of which are likely to cause hardship to those who can least afford it.

canvas said...

Yak, what political party is in favour of 0% IHT ?

I don't think class envy has anything to do with it. Does money buy you 'class' anyway? What does class actually mean in 2009?

It's simply about fairness and priorities. The subject of IHT is an emotive subject - but only affects a tiny percentage of the population. It's a distraction right now...

Dick the Prick said...

Bet Max Clifford got his out of town.

troymolloy said...

"Jade did what any good parent would do and made every effort to provide for her children after she had gone."

This line confused me when it was all over the MSM a few weeks back. Miss Goody made most of her money a long time before her illness... I'm sure I recall reading a figure of £3m earnings in the 2 years following Big Brother. The fact is that unless she did exactly the opposite of 'what any good parent would do' and spent the lot in the intervening few years, cashing-in during the final days/weeks/months was not necessary for her sons' future at all... though I'm sure anyone else who stood to make a few pennies from Jade's misfortune hesitated to explain that to her. Regardless of that though, the tax take on these larger estates is obscene and in my view bordering on immoral.

"Even if the IT threshold was raised to £1m only 3,000 familes would benefit."

Yes, I've heard that one from the government too. But does it mean 3,000 every year? That number is around 3 times the 'official' number of UK deaths from cervical cancer per annum, in which terms it hardly seems insignificant.

I pay tax at the lowest rate and don't expect to be paying inheritance tax on my parents' estate, but I really can't come around to the point of view that IHT is 'fair', any more than I consider different levels of income tax for different levels of income to be 'fair'. Neither are.

Donal Blaney said...

She could certainly have done some clever tax planning to avoid IHT altogether. If she did then good for her. Avoidance, after all, is entirely lawful. But leftists hate avoidance AND evasion of tax, so surely they cannot approve of her avoiding tax? Surely?

canvas said...
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canvas said...

troymolloy says "but I really can't come around to the point of view that IHT is 'fair', any more than I consider different levels of income tax for different levels of income to be 'fair'."

Many people would say it is 'bordering on immoral' for those who are well off to not pay a little bit more in order to help those who are struggling or less well off. That is not an unreasonable expectation and it helps to make our society a fair society.

I can't think of any political party who would disagree with higher rate tax bands...

William said...

Can you honestly say you would like to cut public spending by £1.8m (or raise taxes on the less wealthy) to give a bonus to the children of a rich person who already have a much better start in life than 95% of kids.

I thought the Tories believed in a meritocracy??

Yak40 said...

jonny
cutting spending on public services, . . . likely to cause hardship

Rubbish.

You've swallowed the government propaganda hook, line and sinker.

You're saying there's no fat, no waste in the public sector, no savings that could be realised ?

Of course there is, billions of it.

Obsidian said...

@William

What exactly is the problem with cutting public spending?

Whenever it gets mentioned it's like it means cuts will stalk through the NHS like the Grim Reaper, as opposed to stopping funding quangos like the Potato Council or bolstering charities like Alcohol Concern.

There is a lot of potential cuts to made throughout the public sector, cuts that won't have an effect on service quality at all.

Yak40 said...

Canvas I don't think class envy has anything to do with it. Does money buy you 'class' anyway? What does class actually mean in 2009?


Obviously you've not lived long enough in the UK. You hear class related sneerings from Labour & leftist types every day, read the Guardian for examples as a start.

As amazing as it might seem, it still runs deep and is actively utilised by left leaning pols.

canvas said...

SO Yak40 how does the 'class' argument relate to Jade Goody's estate IHT then? It doesn't make sense to me.

WakeyWakey said...

Ian Dale
"Melissa, I read that her husband didn't figure in the will and that it was all left to the kids"

I understood that he has six weeks to legally challenge the will. If he's nippy he might be able to get his hands on at least 50%. He really needs to be bold with this though.

Michael said...

Canvas, I have decided you will now buy me a new iMac. You can afford it, you have a fine computer and mine is old. In the long run you won't miss the income and I will do so many great things with it.

Oh, and you don't have a choice, I am taking the cash from you. I know you think it is your money, but we have better priorities durning a recession than to let you keep what is yours.

YOU should be more concerned with those who are struggling to make ends meet.

You are only a tiny percentage of the population, this won't impact the politics of very many, so it won't really be theft - it is for a greater good.

Do you need the address of the Apple Store where you will be compelled to pick up my iMac for shipping to me?

And don't ask me "by what right" I have the votes to do this.

That makes it okay.

canvas said...

Michael, I am happy to pay tax. I am happier when I know my tax money is being spent wisely.

I would rather it was spent to buy schoolbooks rather than a porn flick for Jacqui's husband. I would rather my tax money was spent on new equipment for a hospital rather than employing an MPs spoilt brat son who is a fake employee.

The Mac is in the mail. :)

Lola said...

I doubt that Miss G executors will pay any IHT on her estate. Good tax planning will be available and getting married was part of that.

Good for her.

IHT is double tax. There is no reason other than envy that it is levied. Only the middling wealthy pay it. The less weall off don't because they have little cash wealth. (BTW the less well off may have very valuable entitlements with notionally huse capital values, for example a State employees pension). The very rich don't pay it because they can afford to organise their affairs.

If someone has worked hard and made some wealth out of taxed income why should they be taxed again? There is no reason other than envy. You may resent someone living on the benefit created by their parents, but that is just their good fortune. What right does anyone to take that away? It is simply envy. And in any event, unless the inheritor does something productive with it the wealth will depreciate. As evidence you can see that the average ROR on the wealth of the rich inheritors is roughly eqivalent to the ROR on Treasuries. All this ROR does is compensate for inflation - in other words if they draw income their capital depreciates.

All tax is bad. And high taxes are exceedingly bad. The State should seek to minimise the tax take, not maximise it. The State always and forever spends money very badly indeed, and by taxing and spending capital it impoverishes everyone, especially the 'workers', those that need capital invested in them to gear up their labour to increase their earnings power.

The only reason lefties use the tax pays for services argument is that it gives them power. It appeals to the laziness and envy in us all. They maintain the fiction that by taking money away from someone else, we can have more and for less effort. It is the fatuous 'I'm poor because you're rich argument.

Yak40 said...

SO Yak40 how does the 'class' argument relate to Jade Goody's estate IHT then?

It doesn't of course. I merely said that IHT was a good example of Labour's politics of envy and their usual stirring of class warfare when it suits their purpose to lay a smoke screen.

Michael said...

Principle: It is wrong for a person or a state to steal. It does not matter if the services being stolen for are wonderful or needed, unless you are charging the person using the service for the service they use you are taking money away with out right.

Now, If I run a business and get generous and donate to charity, the fact that i earned that money from many sales does not make it theft - I earned the money, they paid, it is mine to do as I will.

Tax money is not the same. It is taken by law, not earned, and should be spent on service I get in trade for my taxes. It must be agreed on by the served, that tax payer - through vote, or representative vote. If I demand a service I should pay for it

It is okay for those that are UNABLE to pay to get some help in paying while those that can pay make up for this added cost.

All fine.

But - when you take by force with out vote or representation - or when you take my cash to pay for services of those that are ABLE to pay, you steal.

When I pay my fair share all my life, and then you take 40 percent at my death - you steal from my estate you are not rendering me a service.

If you charge my children a normal income tax on what they get - that is the same as if I paid them to work for me - then that may be your right - but IT is MORE than this amount. it is not fair to the poor or the right, it is theft.

It hurts the greater good by lowering the cumulative effect wealth has on a family tree.

If you can get rich for your ideas and labor you have motive to do so, if there can be a lasting impact on the good of all those born after you it lowers the need for services like the public dole.

Taking that away, is immoral - the dead are not represented, they have no vote, their wealth is rightfully their heirs - and the government has not special right to take any of it.

tory boys never grow up said...

If you and Donal Blaney think that a £4m estate will attract a flat 40% - especially given the exemptions, the fact that Jade Goody was married and that is even before the use of trusts, and taking account of of the lousy maths (40% of £4m equals £1.6m) you are clearly so ignorant of how IHT works that you really shouldn't say anything on the subject. Are your political views on otehr taxes based on a simialar degree of expertise?

So in the Tory regime where millionaires are exempt from IHT who will the pay the lost tax revenues - given that you are not promising to reduce overall taxes? Perhaps then we can start applying hyperbole to those victims of Tory tax rises?

RobertEve said...

We should not pay tax twice - but I can make an exception for Jade Goody.

Chris Paul said...

Blaney is an idiot. Anyone that repeats his crap needs to think again. This was days ago. We said this then. Last Tuesday. Blaney is an idiot.

Jade Goody had tax planning. Jade Goody had a Trust for her boys. Jade Goody was married too. Patrick 4:40pm explains.

Jimmy said...

"I thought the Tories believed in a meritocracy??"

Well now you know.

niconoclast said...

If it is ok to use reasonable force to repel and prevent a mugger or burglar from stealing ones wallet or purse why not the same when it is government trying to do it? An immoral act from an individual on another does not become moral when it is performed by government - indeed it is worse in the latter case as government is supposed to defend individuals from predatory acts of violence and theft,not perpetrate such acts.This is a clear case of governmental theft (as most taxation is) and it cannot in any way be morally justified.

Dave Cole said...

Assuming there's been no tax planning - which I'm sure there has - the IHT would be £1,350,400.

xD.

H said...

You die!!! Why should the state benefit from it?

In fact why should anyone but your loved ones get any financial benefit from your death?

Money hasn't suddenly appeared that didn't exist 2 seconds before you breathed your last - so why does the government (don;t care whether left, right, centre, blue, red, green, orange, purple or whatever) suddenly feel it is entitled to this? Why should dying be a source of government income?!

Jimmy said...

"Why should dying be a source of government income?!"

If government is to tax any activity then it is probably best to choose one you can't avoid.

Donal Blaney said...

She reportedly left nothing to her criminal husband (now widower). Therefore the only way to avoid IHT was - as has been said - by a trust of some kind. I'm all in favour of such tax avoidance. But to see - what is Derek Draper's phase? - windowlickers like Chris Paul endorse tax avoidance like this is delicious. If it were a Tory wanting to avoid tax it would be evil. But because it was Jade, he and his muppet friends are all in favour. ROFLMAO @ Chris Paul.

The solution? Repeal IHT outright.

Arleen Ouzounian said...

You forgot the 0% tax nil rate band - it's a whole £312,000 !!

Inheritance Tax Guide UK said...

More people in our country are beset with problems concerning the constant changes in inheritance tax laws.  Confusion as to what are really the rules and regulation with regards to inheritance tax

Anonymous said...

Born free, taxed til death (and after death)