Page 12 | Inheritance Tax

Annabella92 · 2024-11-18T13:38:57+00:00

Is it wrong to try and avoid inheritance tax? Is inheritance tax itself unfair? Has your family taken any measures to avoid it?

Rollercoaster1920 · 18/11/2024 14:06

Although with defined contribution pension pots now being included there will be a lot more people sucked into inheritance tax. Basically any homeowner in London and surrounds who actually saved for retirement will be caught if they die around retirement age.

Sofa1000 · 18/11/2024 14:06

You say it’s unearned income but leaving your family a 3 bed semi in the SE used to be something that wouldn’t get taxed massively. It’s the same house now but the children often can’t afford to keep it and they need the money to buy anything of their own.

ilovesooty · 18/11/2024 14:02

Bobbingtons · 18/11/2024 13:58

The majority of inheritance tax paid is for unearned income as a result of house price increases so isn't taxed twice. In addition without insurance tax it widens wealth inequality as it would lead to a wider disparity in home ownership whereby people who don't inherit can't buy property, but people who inherit do.

At the moment less than 5 percent of estates pay insurance tax. This is predicted to raise to 7 or 8 percent by 2033 so very few people are affected. This really is a non issue for the majority of the population.

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I agree.

Bobbingtons · 18/11/2024 13:58

youngoldthing · 18/11/2024 13:43

I would set up a trust to avoid it and I’d encourage my parents to do the same.

why on earth should you be taxed twice?

The majority of inheritance tax paid is for unearned income as a result of house price increases so isn't taxed twice. In addition without insurance tax it widens wealth inequality as it would lead to a wider disparity in home ownership whereby people who don't inherit can't buy property, but people who inherit do.

At the moment less than 5 percent of estates pay insurance tax. This is predicted to raise to 7 or 8 percent by 2033 so very few people are affected. This really is a non issue for the majority of the population.

twomanyfrogsinabox · 18/11/2024 13:54

MidnightPatrol · 18/11/2024 13:51

@twomanyfrogsinabox is it more or less fair than people paying 40%+ on earned income?

It's likely 40% has already been paid in tax so another 40% in IHT is 80% in total.

MidnightPatrol · 18/11/2024 13:51

@twomanyfrogsinabox is it more or less fair than people paying 40%+ on earned income?

yorktown · 18/11/2024 13:50

OP, are you running a school debate?

twomanyfrogsinabox · 18/11/2024 13:49

Hoppinggreen · 18/11/2024 13:46

But you won't be taxed twice, the people who earned it are presumably taxed and then the people who inherit it are - different people.
Having said that I pay all the tax I have to legally but try to avoid any more if I can BUT if I am getting free money I haven't worked for then I don't have a huge problem paying tax on it, its money I never planned for or expected

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It's the amount you pay as well 40% seems very high, 20% would be more reasonable.

twomanyfrogsinabox · 18/11/2024 13:47

youngoldthing · 18/11/2024 13:43

I would set up a trust to avoid it and I’d encourage my parents to do the same.

why on earth should you be taxed twice?

When I looked at trusts (a few years ago) they were expensive to set up and you paid quite a bit of tax on them too. OK for the mega rich, not sure about for us.

Hoppinggreen · 18/11/2024 13:46

youngoldthing · 18/11/2024 13:43

I would set up a trust to avoid it and I’d encourage my parents to do the same.

why on earth should you be taxed twice?

But you won't be taxed twice, the people who earned it are presumably taxed and then the people who inherit it are - different people.
Having said that I pay all the tax I have to legally but try to avoid any more if I can BUT if I am getting free money I haven't worked for then I don't have a huge problem paying tax on it, its money I never planned for or expected

MidnightPatrol · 18/11/2024 13:43

No more wrong than the many other ways people ensure they reduce their tax bill.

Which pretty much everyone in Britain is trying to do in some form, even within the limits of PAYE.

youngoldthing · 18/11/2024 13:43

I would set up a trust to avoid it and I’d encourage my parents to do the same.

why on earth should you be taxed twice?

twomanyfrogsinabox · 18/11/2024 13:43

Nothing wrong with paying as little tax as possible. I keep thinking I should be giving money away to make sure I'm below the threshold.

Ginmonkeyagain · 18/11/2024 13:42

Send me £200 and I can teach you the one amazing trick I used to avoid paying IHT.

ThreeTescoBags · 18/11/2024 13:40

Call now to have your say...