Originally posted by d000hg
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As the daft rules stand, if the first partner/spouse to snuff it bequeaths _anything_ to someone other than their partner then inheritance tax is payable on the whole estate (and then again on the entire remnant when the second partner pops orf).
What this obviously means is that the first partner inevitably shifts the whole lot over to the surviving partner, and the tax man sees no interitance tax until the latter has also died.
So it would make more sense (it seems to me, if I haven't misunderstood the rules) to simply levy inheritance tax on any portion of the estate bequeathed to other than the partner. That way, the Government would be no worse off in the end, and they would likely get a piece of the pie when the first partner died.
Also allowing the first partner to bequeath to others without this "double penalty" would generally mean younger relatives inheriting money earlier, which would presumably stimulate the economy, instead of old timers simply hoarding the money in bank accounts.
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