Inheritance Tax

Yes lets give it all away and let the state pay for our old age, why worry about our needs in later life. Spend, spend spend and give the rest away, no money, no tax, perfect. What idiot thought it was a good idea to scrimp and save. We got it all wrong just blow the lot.

I didn’t say we should tax inflation.

I’ve said that you probably haven’t already paid 40% tax on the value of your estate, if most of it is from the inflation in property value.

Which is true.

Kemi has already said that she will reverse the new farmer's IHT, I am hoping that they will abolish it completely for everyone or at the very least anyone leaving less than £2m should not have to pay anything.

My problem with IHT is that Ive worked all my life, saved and been fairly frugal. In part so I could leave moneys to the children.
So we've bought a house as tenants in common, so we can each leave our half to the kids, so it doesn't go on care fees.

At some point I will be giving the kids regular payments out of excess income(tax free!).
Always use the 3k gift allowance each year.
Eventually will downsize and will be 'getting rid' of the surplus cash.

On the other hand people don't work, claim benefits half their lives and get free elderly care.

You want to tax inflation? Wow.

Any other plans to ruin the economy?

If the sole parent is not a widower and the child has another parent around then £1m + is a hell of a lot for one parent to leave one child and it’s right that everything over £625 is taxed at 40%.

Not quite. By that reckoning it would be 64% not 80% because the second tax grab is only on the remaining 60% of the original amount.

I agree that the loophole should be closed for the wealthy only looking to avoid it.

It's 40% of the 60% left, so 64% tax if taxed at 40% twice.

Is the ‘sole parent’ a widower? If so the nil rate is £1m if a property is involved. So much disinformation…

Not if you managed to make it through primary school maths it isn't.

I disagree. See my earlier post about this probably hitting a lot of working class people that have worked hard to earn well. If they die in the years before or soon after retirement.

Say a property worth 700k in the SE. Mortgage free after a lifetime of working.
A DC pension pot of £425k is required to get approx. £30k for 20 years (after that state pension).

So £125k would be liable for inheritance tax as a couple.
As a sole parent £625k gets taxed.

Lots of older parents in my friendship group so a 55 year old with a 13 year old child could mean the 13 year old is taxed heavily if the parent dies.

The challenge with farms is that the super rich have been buying up farms as a tax loophole for years now (that's why people like clarkson buy them)rather than to actually farm. There is an argument that the iht changes will actually free up land to be farmed again. The legislation could be made fairer by putting in clauses around the productivity of the farms so that iht is not payable if it can be proved that the farm is being genuinely worked by the family, although I would imagine the majority of farms with over a million aren't solely owned by a family but are an incorporated business.

So much misinformation on the farms too. If a farmer sat down and did the sums h’d realise James Dyson and Jeremy Clarkson are deliberately whipping them up into a frenzy simply because their IHT avoidance scam no longer works, as a result agricultural land values will plummet and they’ll loose their investment too. They are cross but the average farmer has no need to be.

So much misinformation on IHT. If you're lucky enough to be left an amount of money where IHT is due then you really don't have anything to worry about financially, much less paying a bit of a tax which would hopefully go towards struggling services etc.

News flash: they can use that money to support their children now. It will probably be more useful to them while they're still younger than at a random point in the future when they're probably in late middle age themselves at least.

It cost my cousin a lot of money to get out of a trust that her parents had set up. She said the only people who benefitted were the solicitor and the bank

Lazy journalism at its laziest....

Avoidance is practically encouraged. It's much better for society and the economy for the older generation to be giving their wealth away to people who can use than keeping it in their bank accounts, much better for them to downsize and gift what's left than to sit around in big houses while younger people suffer a housing crisis.

Worth pointing out that the historic "only 4% pay it" will massively change going forward due to:

• house prices
• pensions now being taxable (before 2015 once you died you lost all your pension money, since then it's been allowed to pass tax free assuming certain criteria are met, after 2027 it's taxable as part of the estate just like savings)
• stocks and shares ISA's and other savings products making it easier for the average person to 'play' the stock market

So the £1m limit is definitely something that is suddenly 'in view' for a lot more people.

Still doesn't change my view that IHT is a perfectly fair thing to charge for a functioning society, I just think it needs to be framed differently nowadays - as it becomes more normal the percentages and limits should come down to get people more accepting of paying it rather than trying desperately to avoid it.

Farms are different, and this policy will massively affect food security.

Both lots of our parents have downsized and, as we said to them, spend all your money! It's yours! We don't expect to inherit!

I'd rather they enjoyed the money (and they are).

People are constantly complaining about services, but no one wants to pay tax to fund them. IHT on the increase in value on a property (not paid for by the owner) sounds reasonable, especially if it's only for estates of a higher value. You get to pay capital gains on shares and 2nd homes, so fair enough paying IHT on the gain in value on a property.

What difference does it make?

It depends how you feel about a society where your life prospects are dictated in part by your parents' wealth.

Currently it's only around 4% of the most wealthy affected, people are getting worried about something they will never have to deal with. Same as the hysteria about farms.

If you are paying inheritance tax, it's because you are inheriting an enormous amount of money you have not earned.

IHT is mostly paid because of property, I suspect very few people have hundreds of thousands in savings.