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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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Someone
Someone from NSW commented:

Death Duties or Inheritance Tax must remain where it is now, dead and buried. The thought of my children having to miss out on their full Inheritance disgusts me. That money has already been taxed umpteen times over the years and must remain tax free for our heirs. When GST was introduced we were promised fewer taxes but thanks to the greedy Liberals that never happened. So the introduction of yet another tax would not only be deplorable but would have many hard-working Australians turning over in their graves at the thought of the government getting their grubby hands on their hard-earned money. 

SCOTT
SCOTT from QLD commented:

Chris, I have just re-read your article and I'm not sure if you have little do with your time or are trying to create something but let Morrison put it out as policy and he will be out of the lodge and claiming millions in payments from tax payers as benefit for his years of undying service to the BCA sorry Australian public that the door to the lodge wont close fast enough to hit him on the A$&#. 

Wellesley
Wellesley from VIC commented:

Absolutely outrageous suggestion. We have paid taxes all our lives in so many areas-Income tax, GST, Land tax, exorbitant stamp duty on land/property sales, fuel tax and excise duty, excise taxes on alcohol, Tax on interest and dividends, capital gains tax, sales tax on vehicles, tax on superannuation. Are we going to be taxed on the air we breathe? Death duties are an abhorrent suggestion and I am vehemently opposed 

Wellesley
Wellesley from VIC commented:

Absolutely outrageous suggestion. We have paid taxes all our lives in so many areas-Income tax, GST, Land tax, exorbitant stamp duty on land/property sales, fuel tax and excise duty, excise taxes on alcohol, Tax on interest and dividends, capital gains tax, sales tax on vehicles, tax on superannuation. Are we going to be taxed on the air we breathe? Death duties are an abhorrent suggestion and I am vehemently opposed 

Someone
Someone from NSW commented:

No death duties. If parents wish to leave inheritance for their children , the government should leave it alone. I don’t want my children to have to go through what we went through financially when we were young. I object to taking money from people who have worked hard all their life and giving it to down and outs who don’t give a damn about anything and thinks the world owes them something. 

Someone
Someone from QLD commented:

Realistically not many regular people have a nest egg of $3M. Apart from the enormous amounts paid for houses at this present time, this can drop like a ton of bricks suddenly. I am self-funded, being overly frugal enough to accumulate assets over the years, despite being on a maximum of $50K wage (only in the final couple of years of work!), supporting 3 people, being a domestic violence survivor and spending only on necessities. I still pay the full tax rate. Sometimes I wonder if I've done the right thing BUT no-one can tell me what to do and how much extra I can earn over the pension (which I don't receive). I am happy in my environment. Therefore I do NOT want my beneficiaries to pay any inheritance tax. The government has gotten enough out of me! The politicians' relatives would be able to afford inheritance tax because the pollies earn so much, including their huge supers. But I am Sure they would make sure there would be some loophole for them and their relatives not to have to pay anything! 

Jeanette
Jeanette from NSW commented:

I would definitely not be happy if I, or my kids, get slogged with Death Taxes. My father had to re-Mortgage his farm to pay for his Fathers Death Taxes, at a time when it should have given him relief, not extra stress and financial problems. My husband and I have worked all our lives, and therefore paid Taxes, to get us into a place to try to Retire comfortably! Definitely not a happy thought! 

Someone
Someone from NSW commented:

Definitely not. Who are the MORONIC academics pushing for this. 

Kim
Kim from QLD commented:

How many times do the government want to tax us. We pay tax on the money we earn, savings interest from banks etc go towards taxable earnings, tax on land or houses we buy in the form of stamp duty. GST when we pay for the funeral plan, so No leave inheritance tax free for the poor kids that will never be able to afford houses in this market. It is a money grab for the government to pay back its debit, Stop all the handout for people that don’t won’t to work. What happened to work for the dole. Use this money instead of triple taxing and more, from people that have worked hard, 

Maxine
Maxine from WA commented:

Absolutely NOT. I have seen families who have to sell so much to pay this tax. People with farms and businesses have to sell their parents life's work. Terrible idea to bring this back!!!! 

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