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NewsThe Death Duty Debate: Should We Tax Inheritance?
The Death Duty Debate: Should We Tax Inheritance?

The Death Duty Debate: Should We Tax Inheritance?

The resurrection of death duties. It may just be the will of the people!
 
Death duties may be back on the table partly because our kids apparently don’t expect a free handout when us parents ‘predecease’ them.
 
And governments may use this social development to argue for the return of 'death' and estate taxes to haunt families again.
 
New social research says older Australians increasingly want to spend deep into their nest eggs rather than pass any savings and super on to their children.
 
But what's truly surprising is that their children are happy with the situation, saying that they are not owed anything and can make their own way in life.

The University of South Australia study (see here) into present attitudes about intergenerational wealth transfer also found the public's antipathy towards inheritance taxes had declined.
 
It's 40 years since they were abolished, and as the only major form of untaxed income, it’s argued restoring them may be both an opportunity for tax reform and addressing social inequality.
 
According to Dr Veronica Coram from the university's Australian Alliance for Social Impact, it's called the decline in the bequest motive.
 
"We talked to young adults and senior Australians, and two-thirds of them thought Australia should consider reintroducing taxes on estates worth more than $3m, while only one in ten were definitely opposed.
 
"Inheritances generally go to people who are already well-off and don't need them; they encourage inequality and inhibit social mobility….Reintroducing inheritance or estate taxation is a way of increasing government revenue while reducing a key driver of inequality at the same time."
 
We had inheritance taxes until the 1970s when the cunning political operator Queensland Premier Sir Joh Bjelke-Petersen abolished them to attract interstate grey migrants. The federal government of Malcolm Fraser then followed suit.
 
So how do you feel now? Is it time to accept that social norms have shifted and it's fair for the government, as happens in many other nations, to tax inheritances?
 
And if this happens, is it more likely that older Australians will indeed spend deep to avoid the taxman even if it means less in their wills for the kids?

 

Any information contained in this communication is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.

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Keith
Keith from NSW commented:

This is being taxed twice on the same money. Who wants that..? Makes you want to know what the University of South Australia is hoping to get out of it. Keith in NSW. 

david
david from NSW commented:

Those well-off will, as they did prior to Bjelke-Peterson reforms, will simply structure their affairs to avoid inheritance tax (think family trusts, off-shore accounts etc). It is inevitable that it will again be the less well-off who will be burdened with this tax. Far more equitable solutions would be reform of family trusts, property taxes and capital gains taxes, but this won't happen as these will effect too many of our legislators.. 

James
James from QLD commented:

I vehemently disagree; I have not worked diligently & with considerable sacrifice and effort to leave some assets for my family & now have wasteful, inefficient greedy politicians (who also derive considerable benefits funded again by the “working man” who bear all the financial risk) now want to reinstate “Death Duties” to further fund and cover the Losses due to their ongoing GROSS mismanagement - the majority of Governments would have to declare Bankruptcy if they have to survive according to rules applicable to Private Enterprise - it took far too long, from 1914 to 1979, to abolish Death Duties. This proposal cannot be allowed to proceed 

Someone
Someone from NSW commented:

No just another goverment ploy to get your money 

Ian
Ian from QLD commented:

I have already paid stamp duty don’t need to pay more to die. My kids can always use the $ now with property prices so high 

Someone
Someone from NSW commented:

A big fat no to this ! 

Someone
Someone from NSW commented:

This conceipt would be another step backwards for all Australians encouraging us all more into disposable wasteful lifestyle. Eventually we all will have nothing!!! 

Gregory
Gregory from NSW commented:

I've paid enough taxes in my life and I don't need their hands in my pocket when I'm dead .The government that votes for that will also vote themselves selfs out of office. 

ian
ian from QLD commented:

Bringing back death duties will be the death of the government who does it Anyone who thinks that millennials do not expect a massive payout when their parents die is living in a dream world 

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