My instinctive reaction to this topic is to be quite strongly opposed to it - I don't think it is "fair" that I should have to pay tax on funds and assets that my parents have accumulated through living prudently and are the results of them paying taxes throughout their lives on the income used to accumulate my eventual inheritance. Likewise, I don't want my kids to have to pay tax on my eventual estate - as I feel if I have done without in order to leave something to them, and have saved and invested the money I have earnt throughout my lifetime, that has already been taxed, it is a major disincentive to know the ATO will take another slug once I've departed the land of the living. However - I found myself agreeing with the sentiments of the following article from Business Spectator http://www.businessspectator.com.au/...cument&src=kgb
The following is an exerpt from the article:
I've now decided that a form of tax on extremely large estates may very well be a good thing. (I may not be of the same opinion if I was likely to either inherit or leave an estate over 10 million though ) I do hope I'm not turning greenAs the report makes clear it is time to have a serious debate about whether it might be better that the children of really successful parents and grandparents start with just a silver spoon in their mouths, not a whole ‘tax free’ cutlery set.
Quite rightly, most Australians who have scratched together a few dollars are very strongly opposed to the government taking it off them as they slip through death’s door. While hard working Australians might reluctantly accept that they cannot take it with them when they die they very firmly believe that they should decide where it goes here on earth. However, the inheritance tax debate needs to focus on the living, not the ghosts who give it. The arguments outlined in the report were far more nuanced and compelling than the critics admit and the issue of who gets taxed and to what extent is the hard choice for the government.
Why is it fair that a young entrepreneur starting out with nothing and building a great company that is sold for $10 million is taxed on his proceeds and some lazy trustafarian whose father dies inherits his $10 million without paying a cent in tax? Remember that the estate of any rich person passes on assets to the beneficiaries without that being a disposal that triggers capital gains tax. This is already a huge concession by the tax office. Ask yourself why you think it is fair that our most prominent professionals are taxed at nearly 50 per cent for working 100 hours a week whilst Toorak and Double Bay cafes are littered with prestige car driving adolescents whose great aunt Agatha died and left them a tax-free inheritance.
Why do we have endless cases like the three rich middle aged children I know who have made no material contribution to the society. They never had a job between them and have done nothing for charity except attend the occasional ball or cocktail party and they were allowed to split nearly $50 million when the old quarry and surrounding land their grandfather left them was rezoned residential and divided into 400 housing lots. Compare this to hardworking people across Australia who pay a huge part of their overtime in income tax whilst every day is a struggle.
What do the resident experts think?