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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 QLD commented:

NO ,NO ,NO The government can not be trusted with anything ! If there is an agreement the Government will change it at a later date so as to affect every home owner. 

Les
Les from NSW commented:

The percentage of people paying no NET tax continues to rise, along with borrowings by our various governments. The Feds expect to plateau out at $1 trillion gross debt (how shonky are its creditors - HECS etc). Divided by 25 million Aussies, leaves an average of $40,000 each. And that assumes the children, babies, unemployed and unemployable pay their share. Queenslanders can tack on a further $25,000 each. With the Feds lowering the GDP per person with their immigration levels and family reunions, teamed with their failure to get the unemployed off the beaches and couches and into the many jobs available on the land at present, we must expect a further lowering of our living standards. In short, the value of what the governments are handing out to the private sector will have to drop, and this will impact on the very unselfish attitude proposed by the questionnaire. This will be exacerbated when interest rates rise and the Fed's current interest payments of $20 billion annually rise substantially. So governments of all persuasions are searching for ways to shore up their fiscal largesse. They have one golden goose option - raid our superannuation, raid our savings, raid our homes - through death duties. This garbage about younger people not wanting (read: not expecting) to receive something on the passing of their parents is a message confected for a purpose. I could formulate a questionnaire and put it to the right people so that it would show these same people expect politicians and public servants alone to pay the death duties due to the fact that they still got paid while everybody else suffered the pandemic. In short, they have maxed out the government credit card and they are running this up the flagpole to see who salutes. 

Someone
Someone from SA commented:

Unbelievable. I sincerely doubt the veracity of this so called study and it sounds like self-serving tripe. My parents started with nothing, we started with nothing and studied/worked hard for our family, paying tax all the way. Inheritance Tax is death politically and it is a ridiculous proposal - please be self funding retirees oh now that you’ve built up wealth for your family we want some of that? How about you give back a chunk of what you have built up even after paying tax already!!! Neville SA 

lynne
lynne from NSW commented:

I have seen what the results of death duty tax has on families. Can’t believe it is even being discussed No death duties Will spend all my money now on my kids and live of the Government in the future, which I don’t want to do Lynne Tierney 

Someone
Someone from QLD commented:

No! That's why we pay taxes all our lives. Politicians need to stop taking pay rises for running us into the red and I see constantly in the Qld government how they waste money. Also I'm wondering what inheritance is there is to tax? Many don't have much to pass down. My parents certainly don't, my mother is in a nursing home with no income or savings, so who then has to pay for her death taxes? 

DALE
DALE from QLD commented:

So if I leave my property to my daughter who has been a great help and little in Super, she will have to borrow to inherit my home etc? Fair for the theives, or government as you call them? You have got to be kidding. Dale Buckland 79 years old. 

John
John from VIC commented:

No No No , they waste enough of our money without giving them more money to waste, a definite NO!!! Wouldn’t vote for any party that wanted to bring it back. 

Nina
Nina from VIC commented:

NO !!!! and No and absolutely NO !!!!!! Who are these anonymous people who claim it is ok......... I would like to see the hard data on these statistics. Just another ploy to find monies that governments spend with no care for the future. I do care and have made sure that there will hopefully be a little left over for me to spend and keep the economy going. Lets make Those that spend Tax payer dollars accountable for how and where they spend this hard earned money !!!!!! 

SCOTT
SCOTT from QLD commented:

absolutely NOT. If anyone wants to talk about social justice how about we abolish the severance pay for the pollies. How about the Government make Google, Amazon & Co pay tax, what about money laundering. People, our parents worked hard, created what we have today, yesterday so no to screwing our kids of tomorrow. 

Someone
Someone from VIC commented:

No way!!! I'm not well off and my son certainly isn't! Our parents worked their guts off and paid taxes throughout their lives and are now on a measly pension! My husband and I are in the generation when we started working, superannuation wasn't compulsory! We won't have enough super and will also be on the aged pension. We try to help our son out as much as we can but unfortunately he's in the age group where he will find it difficult to buy and own his home! Tax has already been paid with the savings my parents and we have, it's double dipping!!! The government should be targeting the tax avoiders, those who transfer their money out of our country. Those who find loop holes, and most are the filthy rich! Those who earn more than $1million each year and those whose savings and assets are over $1million!!! So leave the inheritance from our hard working families. They've earned it! 

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