Inheritance tax law talk triggers heated debate in China
A poll showed that seventy per cent of the elderly in China believe that the cut-off amount for a prospective inheritance tax should be at least 10 million yuan (HK$12.6 million), during a time when death and taxes have been debated more fiercely than ever in China.
In addition, about half of the 500 elderly surveyed believe the cut-off amount should be between 10 and 20 million yuan (HK$12.6 million and 25.2 million), China News Service reported, citing a poll conducted by China Will Bank, a charitable organisation that helps senior citizens in drawing up legally binding wills for free.
The poll also revealed 95 per cent had sought advice on the property values of their homes when they were setting up their wills, underscoring how important aged population in China value their properties.
The survey findings are the latest development in an ongoing heated debate on an upcoming inheritance tax, triggered in February when the State Council, China’s cabinet, issued a document in which it called on local officials to explore the terms of levying the inheritance tax at an “appropriate time”.
The debate escalated after reports emerged saying that a preliminary proposal for inheritance tax would be brought up at the annual Chinese Communist Party convention in November, in which major state executive and legislation decisions are often made.
Under the latest revised version of the proposal, the cut-off amount for inheritance tax is 800,000 yuan (HK$1.01 million), and net successions of 5 million, 10 million, and 30 million yuan will be subject to tax amounts of 840,000 yuan, 2.09 million yuan, and 10.34 million yuan respectively, according to government calculations.
From the government’s point of view, levying an inheritance tax has advantages —it could help to curb China’s ever-yawning gap between the rich and the poor, subsidise local governments’ increasing debt pile and to improve social mobility, as part of the government’s approach to adjust social income distribution.