Inheritance Tax

As long as it's done long before needing care etc., it's perfectly fine. That's why you do it as soon as possible and don't delay. It's also better for the young people to have money when they actually need it rather than having to struggle and wait until middle age or later to get their full inheritance. Far better passing it down the generations sooner rather than it just being sat in a bank account earning paltry interest and losing value in real terms due to inflation.

I’ve heard it said that inheritance tax is an entirely voluntary tax.

Does this real world understanding just so happens to fit with your ideals on taxation by any chance?

It must be nice to be this sheltered and naive.

The country wouldn’t be in such a mess if people had a real world understanding of money and taxation, rather than a rainbows and unicorn view of how it works in reality.

why on earth should you be taxed twice?

Unless you're planning on being resurrected to inherit from yourself then you're not.

that's exactly why I'm going to do this pretty much on their 18th birthday whilst I'm still in middle aged

I'm not wealthy by any means but I have a very modest property in London and together with pension this will push me over the limit. So I fully intend to give DC most of it as soon as they reach 18.
Then if I need to move on benefits or to have care it's going to be state funded. I'd rather go this way then to hand over 40% of my lifetime savings to the taxman.

Intentional deprivation of assets.

My parents set up a trust after attending a financial planning seminar which put half the property into trust, plus the savings of the first to die. We ended up paying more in CGT, solicitors and financial advisors fees than we would have in IHT. It was only when our second parent died that we realised the advice we received when the first parent died was very cleverly worded.

@taxguru the point of pension tax breaks is to incentivse people to save to fund their retirement, not snaffle tax free money away for their children. You have to pay tax if you take it as a pension so it is only fair people who inherit any pot not used also pay tax.

Honestly to contortions people will go through to justify not paying tax on unearned windfalls is hilarious.

I really like this idea, massive rises in house prices only benefit those downsizing or inheriting, anything we can do to stop the ridiculous inflation in house prices has got to be good.

There's nothing wrong with managing your finances - which includes legally limiting tax liability - appropriately. More of us should take a more active interest in doing so.

As a concept, yes, I do think inheritance tax is unfair. However, given it's not going away any time soon, the actual IHT thresholds need to be revised, as does the entire IHT and probate process. At the moment, IHT has to be paid within 6 months of the date of death, and before probate is granted. Which creates huge problems for poorer people who, for example, may inherit their parents house, but no cash. You can't sell the property until probate is granted, and you can't even apply for probate until IHT is paid. This leaves people in the precarious position of having to get a probate loan (on which they must pay interest) / possibly apply for some sort of repayment plan (on which they'll pay interest) with HMRC. All this does is support loan sharking by another name. It would make much more sense if HMRC simply applied some sort of claim to the property for the full IHT amount, which they'd receive directly upon the sale of the property.

No it isn’t wrong to do everything possible to not pay it. It has already been taxed once. I don’t see why I should feel any guilt for avoiding it.

Both sets of ILs will attract IHT and I have no issue at all with this. They both have small properties which are in london, we will still receive a lot of money that we didnt earn (assuming FIL doesn't date and remarry and leave to her!)

I will probably be tax eficient with my own estate but the wealth gap is widening and turning us into a two tier society, which isnt good for anyone

Effectively they do so not sure what your point is

My Dad was advised to set up a Trust. The accountant bungled it all a bit, or didn't explain things properly, and we (brother and I) weren't too involved at the time. After he died, we still ended up having to pay a fair amount of tax. I don't actually remember how it all played out exactly, it was a very difficult time. In short though, whenever I hear "set up a trust", I always tell people it's not that simple...

Blowing the lot on a First Class around the world trip is my favoured trick

Well dead people don’t pay it do they 🤦‍♀️

Goodness yes, it's a bloody stealth tax.

Get a good financial advisor OP. You have to jump through a few hoops but fortunately there are still legal ways to completely avoid it. I won't pay a damn penny of it and neither will my children.

(I'm not against tax in general. If I thought the funds would be spent wisely, I'd back paying more income tax).

Avoiding inheritance tax is selfish and immoral and is the province of wealthy people who want other people to not only pay for the services they use, but also to be able to retain privilege and wealth within their family, never caring that others who actually have far less than them are actually having to pay for this

Other people are not paying for the services that wealthy people use. Wealthy people put in the most taxation, and use the least services.

We are wealthy, but not super wealthy, and we live in the SE, so costs for housing have been eyewatering, with huge mortgages, for fairly standard houses. We have paid for our own healthcare, for the children's education. We pay high council tax, and use few services. We pay tax at 40%. We have never claimed any benefits. I don't mind any of that. I do mind paying IHT.

The wealthy are often just about the only people in this country that are net contributors and actually pay for the services they use. They pay all sorts of tax during their life and often in much greater quantities and much higher rates than the average person.

The question is should they be taxed yet again when they die? If you are so bothered about people paying for the services that they use then you are looking at completely the wrong demographic. It's everyone else that isn't paying their way!

As you responded im making the wild assumption you are still alive, in which case you didn't pay any inheritance tax

This.

I think autocorrect might have introduced some words into a PP/

The whole point of IHT free pension pots was to encourage people to save in pensions.

Tax relief at marginal rates for contributions is to encourage workers to provide for their retirements.

What you’ve given are examples of indirect taxation which is different.

what I’m taking about is direct taxation through income tax, capital gains tax etc on a specific source of income.

As to the myth of being taxed twice @Bobbingtons has covered this.

Another myth of 'I worked all my life' is patently untrue and often those saying it either have been retired longer than working or never worked at all.