Inheritance tax is an undoubtedly emotive and political subject. Proponents argue that taxing people on their inheritance redistributes income and helps society as a whole. Those who are against it say that it is a double tax and that it’s a basic human right to provide for your children, which the government should have no say in.
A survey of 3,000 Brits by William May, retailers of luxury vintage watches and fine jewellery, questioned what people think the threshold should be on inheritance tax (currently at 40% on estates above £325k). Considering how rapidly house prices have increased over the past few years, many may argue that £325,000 doesn’t seem at all high, and that the threshold should increase. They were also asked whether they think inheritance tax should exist at all.
It was found that overall, Brits feel the threshold should be raised to £679,000 – more than double the current value. And on average, nearly 3/4 (70%) do not agree with taxing people on their inheritance…
Respondents in the East Midlands believe the threshold on inheritance tax should be £676,000 – just below the national average. It was also found that 2/3 (66%)of respondents in the East Midlands feel inheritance should not be taxed.
Interestingly, the survey also found that over half (58%) of respondents did not know what the current inheritance tax rate is.
[According to UK regulations, inheritance tax is defined* as a tax on the estate – this not only included property and money, but also personal possessions such as family heirlooms and jewellery. Potentially this means that people might be forced to sell items passed down of sentimental value, just to pay the tax on it. While there are exceptions, the current standard inheritance tax is 40% and is charged on the portion of the estate that is above the tax-free threshold of £325,000]
To see how responses differed across the UK, view this interactive map: https://www.william-may.co.uk/inheritance-tax/.
The survey found that 74% of respondents feel that personal possessions that might be included in the inheritance tax, such as jewellery, should be excluded.
Moreover, nearly two-thirds (60%) agree that the inheritance tax threshold should be correlated to house prices.
Nearly two-fifths (39%) of Brits admit they wouldn’t declare gifted jewellery from a parent in order to avoid paying the inheritance tax on it.
Respondents were also asked what items they would like to be exempt from inheritance tax and it was found that over one-third (34%) said land. 20% felt jewellery should not be taxed; 18% said artwork; 16% believed cars should be exempt; 7% said vintage watches, and 5% said shares should also be inheritance tax-free.
‘Luxury possessions like fine jewellery and vintage watches are priceless in terms of sentimental value, and often in terms of physical value too,’ says Nick Withington of William May. ‘If you’re thinking about investing in a timeless piece, it’s worth planning ahead so it can be passed down (legally) free of inheritance tax.’
