Inheritance Tax

You don't hit inheritance tax until you hit 1 million in most cases. So not as a child of the working class.

Now even with properties going through the roof I doubt the adverage person gets much that much change from wrapping up an estate. But maybe I'm nieve.

I'd rather buy my myself all the help I could buy in my damage than pay tax. No one likes tax surely

I don't agree with inheritance

I think it’s unfair. People have already paid tax on their income. This is how they’re rewarded for saving their money with a view to supporting their children.

We are one generation away from a huge split in society: group 1 being those whose parents saved money and bought a house, group 2 being those who didn't.

What the offspring actually do with their lives will largely be irrelevant, a not-inconsiderable percentage of people will basically be given a several-hundred grand payday in the next 10-15 years based purely on their parents financial decisions in the 1980's and 90's. And they'll get it totally tax free up to £1m. And people are still complaining, it's crazy!

We've never had such a "problem" before, where the amounts in play are normalised. Even 20 years ago inheriting £1m was not an issue many people would have had, but now almost anyone with a decent pension and/or a house south of Watford is worrying about inheritance tax.

I personally think that some sort of inheritance tax is fair enough, but they should significantly lower the percentage and also lower the point at which it kicks in - 40% is too high and gets people's back up even if it's only for £1m+. If everyone knew it was, say, 10% over £500k I think it would be less of something to protest about. 40% just seems punitive.

Hear hear

Especially the point about being taxed twice.
If people were really bothered about being taxed twice then VAT would be a much more sensible target for their ire.

And also the point about this being a tax that affects only the most privileged top % of people. Tiny violins all round.

we’re in a situation where those who inherit will be ok and those that will not will not. Inherited wealth (either from a living or deceased benefactor) will soon be the ONLY way to buy a house. Totally unfair to those without someone able to gift to them. IHT is fair.

The threshold is roughly £1m when taking into account a couple's assets. You get £1M tax free - and then you quibble about paying tax on the rest? What kind of society are we living in with this greedy I'm alright Jack attitude? Where's the sense of responsibility and duty to our country? Where's the compassion? Personally, I think wills and inheritence cause so much rancour within families, and so it would be better if, when you died, everything went to the state. No arguments or falling out between siblings, exes etc...

You forgot the interest on the 60% left which is taxed at 40% and then taxed again at 40% as well, the maths are not that simple.

It's not ethically wrong to do what is legal to minimise your tax exposure.
However, you really will be actually dead by the time any inheritance tax is due. The tax applies after you have finished with the money because you are dead, and before your legatees recieve anything, so no one alive loses a penny.
The idea that it is unfair for the "same money to be taxed twice" makes you sound eye-swirlingly bonkers. All money is taxed numerous times. I buy a thing for £125 and £25 of that goes to the government as VAT and the rest goes to the business owner. They pay 20% tax on their profits and then pay their workers or pay their shareholders dividends, who then pay income tax on the money that they receive which has already been taxed, and then they spend their money on items that attract VAT even though they have already paid tax. The same money gets taxed whenever it changes hands, that is the nature of all taxes, and IHT is so incredibly lenient (only 4% of estates pay a penny, most people are exempt) that it's really not the appropriate target for your angst. If you are in the frame for your estate possibly needing to pay any IHT then your legatees are already in line to receive a life-changing amount of money that the vast majority of the population can never dream of. Taking a small slice to spread the benefit to those who aren't so lucky is a small price to pay for living in a civilised country where the rich and strong are discouraged from actively stamping on the faces of the less-fortunate.

Apart from completely stalling the housing market.

The trick with property could be to downsize early and give away the difference.

You have to pay a 10 year anniversary IHT charge on trust assets.

If you want to tax the increase in property value charge 40% of the increase in value every time someone sells a house, that would sort it out and raise much more money.

£100 taxed at 40% = £60 left
That £60 taxed at 40% = £36

So it's not 80% in total at all. Two 40% taxes on one sum mean 64% of the initial sum goes to tax.

Still high but let's keep the maths true.

Inheritance tax is the fairest of all the main taxes IMO and if anything should be increased

The people who inherit did not earn that money in any way, nor did they pay tax on it. And people who inherit a substantial amount (which you need to for IHT to kick in) have probably had a financially privileged life already.

There is nothing wrong with trying to avoid any kind of tax. Most of it is wasted anyway.

but thats after the first tax free part

I have life insurance to cover it so DC wouldn't need to pay it and can benefit if I die when they are young. Shall reassess in about 20 years time when they are adults as to what makes the most sense then

I don’t think it’s particularly unfair. Less than 4% of estates pay inheritance tax, so it’s a pretty niche issue and only affects wealthier members of society. It’s arguable that the nil-rate threshold should be increased to account for the huge increase in property prices, but the idea of IHT as a whole doesn’t bother me.

Avoiding it by legitimate means such as gifts made more than seven years before the gifter’s death are fine imo. Dishonest schemes are not.

Bit irritating that we’re engaging with an OP who gives no opinions of their own. But for what it’s worth I am literally looking at this at the moment.
I am separated but have drawn up a will to leave everything to DC instead of ExH. It means they’d have to pay IHT. Wouldn’t be able to stay in the house. Not enough to split and get places of their own. If I live long enough I’ll look into avoiding it.

Except you’re not taxed twice…

I think its shameful. Punishing the people who carefully saved and looked after their money and wanted to pass it on to their family. They've already been taxed on it when they earnt it.

Better off spunking all your money up the wall or buying expensive presents for everyone whilst alive.

Well - it isn’t actually.

Most people’s wealth is property value (the inflation on which is entirely untaxed) and pension, which is typically saved pre-tax too.

So some might have had tax paid on it, but much won’t.

I disagree with the principle of it, but bearing in mind the state of the country’s finances, I can stomach it for now as I can’t think of a better way to plug the financial gap abolishing it would create.

Not something we really needed to think about until the changes in the budget regarding pension funds. Now we might have to consider spending it or giving it away to DC and cross our fingers that we live another 7 years and don't need care in our later years.