| Autor: |
Chamberlain, Emma |
| Předmět: |
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| Zdroj: |
British Tax Review; 2015, Issue 5, p679-690, 12p |
| Abstrakt: |
The two main taxes on transfers of wealth are capital gains tax (CGT) and inheritance tax (IHT). There is no logical reason why as a matter of policy transfers of wealth on death should pass free of CGT but subject to IHT while lifetime gifts should pass free of IHT but subject to CGT. IHT is unpopular despite raising relatively little money: it is perceived as double taxation and targeted at those whose main wealth is tied up in their family homes rather than at the seriously wealthy who can afford to make lifetime gifts. There is very little published information on how much wealth is handed on tax free during a person s lifetime. This stark contrast between the regime for lifetime gifts versus transfers on death is not followed in most other countries and the fact that lifetime gifts of cash do not have to be reported makes it difficult to frame sensible policies on how to tax transfers of wealth. IHT contains many anomalies and loopholes particularly in the areas of business property. It is complex as illustrated by the recent proposals on the residence nil rate band. It seems difficult to reform such a complex tax: there are many vested interests. It may be better to adopt a different model: abolish IHT but impose CGT on all gifts--whether made during the donor s lifetime or on death. This would ensure a more consistent regime. It would be necessary to limit the main residence relief possibly to total gains of £500,000 over an individuals lifetime and change the CGT regime in relatively minor ways for trusts, emigrants and foreign doms. This change would result in winners and losers with different distributional effects. I f the ability to arbitrage between the CGT and IHT regimes was removed along with certain loopholes, overall revenue might increase. The alternative is to reform IHT. Less radical options could include extending the period necessary to survive lifetime gifts from 7 to 10 or 15 years or reforming business property relief. A more radical option is to introduce a donee based system similar to that found in Ireland under which the rate of tax would be dictated by the level of lifetime inheritances by the donee. The more the donee has inherited the higher the rate of tax. [ABSTRACT FROM AUTHOR] |
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