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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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The Death Duty Debate: Should We Tax Inheritance?

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Ron
Ron from QLD commented:

Death duty might seem OK for estates worth more than $3 million but once in place they could easily be applied to lesser estates by future governments, also the way values are rising it won't be long before $3million will be the norm. We have worked incredibly hard all our lives. No one has a right to tell us what we must do with our hard earned money (in the form of death duty). If any government even contemplates the introduction of a death tax, they can kiss being elected goodbye. 

Someone
Someone from NSW commented:

I would like to be sure that the study you are referring to had a representative sample as many people I talk to are definitely hoping to leave their children something that will help them to have a house in this difficult time. Death duty might seem OK for estates worth more than $3 million but once in place could easily be applied to lesser estates by future governments. 

Colleen
Colleen from NSW commented:

Absolutely not, Government love spending it and wasting it on junk social agendas! they didn't earn it and its already been taxed anyway earning it and totally agree with Stephens Quote below. 

Babs
Babs from NSW commented:

Here we go again always wanting more from us our family will need all the help that they can get to try and obtain a place they can call home in the future, inheritance is there’s not the government To say that the children are happy with the situation Is a understatement 

Eral
Eral from NSW commented:

No way. Never I have been frugal though retirement to give my kids better opportunities in their future’ It is my money and my choice 

Someone
Someone from ACT commented:

If there is a high level, say assets of $20million, some of this can go to supporting the health needs, education etc oF the next generations who have had very little chance to reap the fruits of all the good times us oldies had the luck to be alive in. 

Frank
Frank from NSW commented:

This is my first comment ever in any forum. I am writing because I totally agree with the views expressed by the other members. I am tired of hearing my husband and I are "lucky" to have a few small assets which we hope to pass onto our son. We have worked incredibly had all our lives. No one has a right to tell us what we must do with out very hard earned money (in the form of death duty). If any government even contemplates the introduction of a death tax, they can kiss being elected. 

Robert
Robert from NSW commented:

A very loud "No". With Sydney real estate prices the way they are, a $3 million estate will be the norm for quite a large number of people in the not-too-distant future. So the number of people likely to be affected will be quite large My parents died with virtually nothing and lived their final years on the age pension. Worked my butt off all my life, and paid taxes and levies in all their overt and covert forms for over 50 years . No child endowment, baby bonus, first home buyers grants etc etc for me. Even had to pay 17% interest on my mortgage at one stage. Married, and raised and educated my children with no HECS. And now, after all the taxes I've paid, and governments have wasted, some academic wankers from the University of South Australia suggest that the government should get another slice of my hard-earned/saved/invested on my demise ?? No way. That's all going to my heirs so that they will have a better start and continuance than I did. The government that tries that will have a very short life span indeed. 

Stephen
Stephen from NSW commented:

Am I wrong to question why this socialist drivel even gets a headline - the Dr's title of Australian Alliance for Social Impact says it all. Just read the second paragraph above a few times - it is stunning to think journalists reprint this stuff (it has been reported on a number of platforms). 'Inheritances ...encourage inequality and inhibit social mobility...:. Oh dear. Then lets give all our money to the government - they do such a good job spending what we already pay them. I'd like to see the young adults they talked to in ten years when they are struggling to bring up a family whilst trying to save a deposit in a market where they need over a $million to buy a small three bed home. Our taxes no doubt pay this Doctors wages - she's been at the South Aust University too long- maybe time for her to live in the real world. Let the ALP bring this to the table for the next election, it would guarantee them many more years in opposition and I cannot see the Libs trying it - they want to stay in office. Thanks for reminding us that our taxes pay for these academics. 

ian
ian from NSW commented:

I cannot think of a more disgusting way to raise revenue. Between all the taxes the federal and state governments raise, now they want to reintroduce a tax to die. This must be not tolerated by the Australian people, once it is legislated even the opposition won't abolish it.I am totally opposed to it!!!!!!! 

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