Inheritance tax ...

[motorbiking]

And some pay, even though they cannot afford to live properly. We've been over this before.

Maybe wages are too low, relatively, not as a minimum wage figure.

Absolutely, the goal is to increase the value those at the bottom can bring, not simply pay them more, because they need it. It's not just work, it's about healthier lifestyles, less smoking, drug addition, alcohol abuse, being obese, self inflicted diabetes etc etc. People need to take responsibility and not expect the tax payer to wipe their ar$es.

 

[JonathanM]

When you say unlisted, you mean publicly? Lots and lots of PE companies are worth Billions, but I don't know of any that are not limited.

In terms of how you pass the company to the next family member (or employee or whatever). You create share holder participation schemes and invite people to buy in to them subject to certain limitations and rules. You may choose to lend them the money to buy the shares which are discounted at say 10p in the £ or 1p in the £1. If the shares are sold you pay CGT on the gain, if you fall out of the scheme or need to be pushed out of the scheme there are various formulas or decelerators which define what you get. These are often called "good leaver" or "bad leaver"

Yes, I used "unlisted" simply because that was the term used in the quoted article. I guess that just means not listed on the stock market. But it's just a private family company owned entirely by three of the grandchildren of the founder. And occasionally I have wondered how you pass on hundreds of millions of pounds in shares without paying a huge amount of inheritance tax and destroying the company.

 

[Lower]

which is why you don't do it like that.

Depends what you're trying to achieve. For example, if you own a company you can leave cash in the company rather than drawing it as income, paying income tax on the income and then paying inheritance tax on it when you die. If you leave cash in a company, the beneficiaries of the inherited company can then take income from that company and only pay income tax once.

 

[JonathanM]

However, the recipient of the shares would then pay tax on any income they receive as a result of owning those shares.

Which seems fair?

 

[Lower]

Which seems fair?

Absolutely.

 

[motorbiking]

only if the shares pay a dividend.

It's fairly easy to destroy the value of the deceased shareholdings and magically create new ones with value for his/her surviving family.

 

[Lower]

only if the shares pay a dividend.

It's fairly easy to destroy the value of the deceased shareholdings and magically create new ones with value for his/her surviving family.

Or you just make the recipient a director and then they can take an income as salary with appropriate income tax.

Not sure what you mean about destroying value of shares. My theoretical example assumes a cooperative environment with the intent of inheritance tax avoidance.

 

[Brigadier]

Those who have sufficient money to squirrel money away in tax efficient ways have already paid more tax in absolute terms (not a percentage but in actual thousands of pounds) than those who don't in my experience.

And, in my experience, I have known people with outwardly not a pot to p!ss in, never earned much, lived very frugally, yet left estates of hundreds of thousands of pounds.


You need to appreciate that people swim in different ponds, so to speak, and open your eyes to the lives of those outside of your own experience.

 

[Brigadier]

Not when you take account of benefits received. About 20% of the population are net contributors and 80% net benefitors.

Depends if you are talking percentages, or gross totals.

I'd also like to know what the 80% / 20% calculation consists of.

 

[JonathanM]

@motorbiking @Lower

It makes sense that there are mechanisms to do this. Otherwise important family companies would have to be broken up to pay the inheritance tax.

 

[Lower]

And, in my experience, I have known people with outwardly not a pot to p!ss in, never earned much, lived very frugally, yet left estates of hundreds of thousands of pounds.


You need to appreciate that people swim in different ponds, so to speak, and open your eyes to the lives of those outside of your own experience.

I agree, people do swim in different ponds and there are extreme cases at both end of the spectrum. I'm referring to the majority in both cases, not the super rich and not the super frugal.

 

[Notch7]

. It's not just work, it's about healthier lifestyles, less smoking, drug addition, alcohol abuse, being obese, self inflicted diabetes etc etc. People need to take responsibility and not expect the tax payer to wipe their ar$es

Isnt it odd, people with money, opportunity have better lifestyles

People living from paycheck to paycheck, not being able to afford heating and struggling to afford the rent... tend to suffer more mental health issues, drink more, smoke, become obese

 

[Notch7]

People need to take responsibility and not expect the tax payer to wipe their ar$es.

you mean like Michelle Mone

 

[Mottie]

People….not being able to afford heating and struggling to afford the rent... tend to ……drink more, smoke,….

So, people that drink more and smoke more can’t afford heat or rent? Can you see where they are going wrong? I can.

 

[motorbiking]

Or you just make the recipient a director and then they can take an income as salary with appropriate income tax.

Not sure what you mean about destroying value of shares. My theoretical example assumes a cooperative environment with the intent of inheritance tax avoidance.

Yes this is fine for small companies but you’ll find bigger private companies find clever ways to ensure that the value of the inherited shares is minimal while at the same time granting the recipients the right to join a new scheme.

Thus the value is destroyed and recreated with tax efficient financial “magic”.

Some on here may find this to be tax avoidance, but the alternative is for the companies to be straddled with debt and collapse.