POGS An article in the Guardian in January this year referred to new research which tracked 634 rare surnames, such as Pepys, Bigge and Nottidge and in so doing showed how wealth has been handed down since 1850. The research concluded that money and assets obtained by way of inheritance rather than by way of earnings was the main contributor to wealth. So, to a fairly significant extent, the idea of the "self made man" is a bit of a myth.
After examining the records of 18,869 people, and dividing them into three categories, the rich, the prosperous and the poor, Professor Clark and Dr Cummins, the two economists behind the study, suggest that there is a “significant correlation between the wealth of families five generations apart”. Put simply, the descendants of the wealthy of 1858 are still much wealthier than the average person in 2012.
You may feel quite happy that the current situation re inheritance tax does not affect you because your estate won't be liable for it. But if fewer people are liable for tax, less money goes into the exchequer and this has an impact on government spending on things like schools and hospitals - so in a very real sense it does affect you. Just as important though is the fact that less well off families are facing cuts in tax credits while far wealthier families are benefiting from tax cuts.
I feel that, if anything, the Inheritance Tax threshold should have been lowered (and I say that knowing that our children/grandchildren are likely at some stage to become liable). To my mind, being able to inherit even two or three hundred thousand pounds without paying tax seems pretty fair to me and the remaining liability for Inheritance Tax will go into the pot to help everybody - not just one family.
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