Sir, – Many letter-writers refer to “hard-earned” assets when referring to inheritances or more precisely estates. The capital gains accrued in property are not “hard-earned”, they have accrued due to luck and a buoyant market cause by low interest rates, a rising economic tide and poor urban planning. For example, two now-retired public servants posted to two different locations at the beginning of their careers, say 50 years ago, will have accrued vastly different estates due to differing property markets, and their inheritors will benefit differently and be taxed differently.
Virtually every letter on the subject of inheritance tax references property – not shares, bonds or mutual funds.
The capital gains exemption given to private residences has lead to the middle-class obsession with property now playing out in the context of inheritances, and is a major reason why elderly people hang on to large houses completely unsuited to their needs. It has led to people objecting to neighbouring developments for entirely selfish reasons, and it has distorted the savings and investment industry. It has lead to the bizarre situation where pensioners with multimillion euro properties consider themselves less wealthy than young professionals with unspectacular salaries living in heavily mortgaged apartments. – Yours, etc,
MATTHEW GLOVER,
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Lucan,
Co Dublin.
Sir, – Inheritance tax is good in principle, as it reduces inequality. However, the failure to increase allowances to match the value of an ordinary family home is unfair. The argument that a family home represents unearned income is frankly insulting to ordinary families who have laboured to provide a home for their family. The point is to reach the correct balance. For inheritance tax, restoring the exempting of the value of an average family home would restore that balance. – Yours, etc,
LIAM ROCHE,
Dublin 14.