To think it’s unfair that some people get inheritance while others start with nothing?

@allthemiddlechildrenoftheworld not to mention that care home fee inflation has outstripped house price inflation in many parts of the country in recent years.

@ThisCandidCritic "the wealth about to be transfered came from house prices increasing 1145% since 1980 and equity prices increased by 7 x since 1984. " dont know where they have got those figures from!! my old house, which I bought in 1985 sold in 1995 only doubled in value about 10 years ago! my house which we live in now was purchased in 1995 and has not yet tripled in value over the past 30 years and we had to add a large amount of savings to enable us to buy it!!! we didnt go on holiday for years so we could save money and move up. nowadays people expect to move up as well as go on holiday every year!!

@Blossomtoes you have to put together a deposit out of taxed income, pay a mortgage out of taxed income, pay your utilities, insurance, council tax, maintenance, repairs and renovations etc out of taxed income. Forgo expensive holidays, jewellery and cars and so on because you have a family home to pay for.

It is the case that house price inflation has been significant in every single industrialised country but it’s pretty much only the UK which clobbers people in return for taking long term economic decisions which are for the good of their family and leave them in a strong position to fund their own old age, including care requirements.

Im glad also that my daughters
can inherit also and we aren’t living in the dark ages !

Unless you bought it very recently most of its value is due to inflation - ie money which has never been earned or taxed.

Why not??? Why the property which I paid for out of my after tax income should go to anyone else but my DC???

Do you know that much admired here social justice heaven Scandi don't have IHT at all? apart from Denmark where it's only 15% but threshold is about £39k

Personally I am very much of the view that the whole system with care and inheritance needs to be looked at- at the moment it means that those with houses worth a mint and especially in certain areas of the country can access far more choice of care over longer periods than someone who has worked very hard, bought their house , been frugal but just happens to live in a cheaper part of the country can - unless they have a condition that qualifies for CHC .

My own view is that it would be better post 40 if we all paid 2% into a ringfenced national care scheme - could be called on then and pay for care homes if needed or care at home requirements. Like an insurance policy - or even make it a fixed amount rather than a percentage.

I think IHT should be 20% on anything over 200k. - up to any level.

Do kids really expect to inherit enough tax free to buy outright @nearlylovemyusername?

£500k won't buy you a decent 2 bed flat in London.

The Duke of Westminster springs to mind…

@Strumpetpumpet The Duke of Westminster has held on to his money and land but for every person like him there are plenty who have lost the family fortune from gambling, bad financial management, extravagance or whatever.
I suggest you read a book called Splendour & Squalor by Marcus Scrivens which documents several such people.
I think you’d enjoy it.

You’re absolutely correct, it just perpetuates inequality. It’s totally laughable that people claim the only reason they have money to leave their descendants is due to their own hard work. The Duke of Westminster springs to mind…

Blimey, how many kids have you got? There are some parts of the country where £100k nearly buys a house outright.

It wouldn't get them even an affordable mortgage on a house each, these days, sadly.
With their salaries being as they are (working full time) and house prices what they are, then they still wouldn't be able to buy a house with their split.
However, I was replying to the original question of basically no-one inheriting anything at all (so all starting with nothing). That would then give no incentive for people to save, live within their means etc.

I’ve inherited healthy genes from my dp’s.
I can’t think of anything better to inherit.

I would actually be happy with anything up to 20%, 40% is simply too high.

I agree with that. There should be no allowances and a standard 10%/15% tax on everyone for me. Maybe that doesn’t raise enough though.

If you don’t need care. Doesn’t always work out. My mums care home fees came to £400,000 plus and she died with the minimum allowed. It’s a bit of a lottery.

You don’t pay it at all because you’re dead. Why’s it a quandary? Just give away everything you can and downsize to a house worth less than £2 million. Job done.

It is a very foolish tax and you don't pay it if you give your money away and live 7 years which puts people in a quandry as most of us don't know when we will die (probably at about 82 but you never do know).

Id have thought the best way would be, like income tax, some bands. So a nil rate, then stepping up.

Definitely. It is fairer and more palatable.

It will gives less of an incentive to take IHT avoidance measures which has perverse distorting effects on people's incentive to work hard and save for a retirement which in turn takes the burden of the state. If the intention of IHT is to encourage a fairer distribution of assets, all it does is make the overall pie smaller for everyone as a result of IHT avoidance.

Like it or not, one of the biggest drivers of wealth accumulation through risk taking and hard work is the ability to keep one's hard earned wealth (subject to paying tax) and then the ability to pass it onto dcs, relatives and other causes.

I know I work harder and for longer because my dd has a disability and I am building her a financial cushion. If the state is going to take 40%, I might as well have the state look after her in terms of benefits. Everyone loses.

Probably. It would certainly be harder to avoid.

Would it be fairer, if a much smaller % was taken above a much lower threshold?

Thank you @AzurePanda well and succinctly put

Life isn't fair!
I'm an only child and my uncle didn't have children but guess what, I'd rather have sibling to share with!