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

I agree with this and I'd like to think that I could live in a society where everyone starts the same. Thing is, it isn't realistic. In reality, IHT doesn't really touch the super wealthy, who'll have assets spread all over the world and hidden in off shore banks (yes, I'm looking at you Royal Family). Even those families which can't have special laws all of their own.

IHT effects the middle classes probably in the South East disproportionately. That means people who have to work for a living and look after themselves with their own pension pot. Disincentivising these groups is a disaster for society. Unless we're all planning on living on the State.

My first car cost £2k when my colleagues were driving brand new cars. We didn’t go on holiday every year when people went abroad and several weekends away. We made sacrifices so that we will be able to leave some of what we have built up to our children. I make no apologies for that. If you taxed inheritance at 100% people would stop working so hard.

Of course it’s not wrong but (assuming you’re single) is a tax free windfall of £500k not enough security for them?

I left home at 16 with nothing, worked hard, few holidays, lived carefully.
I bought my own house, mortgage now paid off.
My childhood neighbour has also worked, but 2x big holidays a year, newest gadgets etc. That's how she's happy, but consequently has very limited savings and rents.
I think I should be able to use my careful budgeting to give my children a little security in a world where them buying a place of their own would otherwise be impossible. Is that so wrong?

The problem is for people with a fairly valuable home rather than the super rich. If you have a house plus 100x as much wealth you can give the 100x to the children etc and survive 7 years and no IHT. If your home where you would like to live until you die is the main asset that is very different. Although David Cameron I think it was increased the tax free part to £1m for couples with a house under £2m leaving it to their children even so that leaves people like I am - single - with "only" a £325k tax free allowance. Now I suppose when I am about 7 years from death I could move back to NE England and buy some terraced cottage in a village for £325k and sell my current home. I would however prefer to stay in my home. I could stay in my home and pay my children market rent putting it in their names and they would be taxed at 40% + on the rent (I do not rule that out) but is is awful the way the tax tail wags the dog for so many older people and worries them.

If we abolished IHT or made the single person tax free allowance the US$13m of the USA rather than my paltry £325,000 that might be a good start.

I can

But you just look like a hypocrite...😆

If pp doesn't want to work more for her DC to have a house like she said up thread that's absolutely fine.

I don't need to work more for my dc to have a home? My dc will be more than fine. Again why you are inferring things I haven't said?

But than don't ask for those of us who do to give up our wealth planned for our DC so her taxes can be reduced and her services improved

I have already said any changes to IHT would impact me & my dc so what is it you think you are giving to me? My parents could easily have a IHT bill of 500k plus (who knows re care costs), but they aren't doing anything to mitigate that & I do not have a problem with that. They also spend & have spent money on holidays etc and retired early, good for them. They do not need to give me every penny, I want them to be comfortable & enjoy their later years.

I worked 60+ hours/week for a 3 decades all in top tax bracket. I wanted to pass as much as possible to my ND DC

I guess this explains why you are so bitter but you don't need to take your anger out on me. HTH.

I agree with you @blueshoes, I really dislike the way IHT encourages people to make decisions in a way that is not in the economic interests of society.

But others fritter money throughout life pre retirement on holidays,take aways,gadgets etc so how is that ok but pensioners spending their retirement they have saved for as they wish isn’t ?

Inheritance

Inhertence has to do with money staying in the family. It’s not dispersed into the community. I’m not getting this thread. The person giving out the inheritance earned that money. It’s his to do with what he or she wants. It’s family money. Do you think you should have a share even though you didn’t do anything.

If there was no inheritance, society as we know it in England would probably collapse! And there would soon be an outcry about cost of mortgages for first time buyers. Private schools would struggle for pupils and state schools would likely be better invested in as a result, or so you’d like to think.

It is unfair and the system is kept afloat through inheritance. Also fair points that some people underachieve as waiting on inheritances. The state is coming for houses anyway with care costs accelerating. Spend it while you can enjoy it, help the economy now while we have a planet to enjoy!

Someone I know just bought a council house for a parent (one less for people who may need it in future) and they’ll be getting it back in inheritance. Or so they think…

In addition, the system is kept afloat by grandparents providing free childcare. Sometimes I wonder what would happen if they didn’t. We’d see the state having to step up a lot more to support women and children. But that’s not going to last anyway as parents have their children later in life. There will be no grandparents to look after children anyway, too old!

<Sigh>

You really don't understand how tax changes people's behaviour and the knock on consequences. Economics 101. I shall leave you to it.

What own goal for Labour? Putting pensions into the liability envelope for IHT? The entire point of a pension is to provide a source of income in retirement so the obvious thing to do is spend it. Why would someone who doesn’t spend their pension then incur uxorious interest by using equity release? There’s absolutely no logic to your posts.

I think you are missing my point about how trying to avoid paying 40% IHT makes people behave in what you consider 'financially illiterate' but in practice logical ways which would have the perverse consequences of reducing the tax take and increasing the financial burden on the state.

Own goal for Labour, as always. IHT is eminently avoidable.

Only if you’re financially illiterate. You were moaning about people spending money to avoid IHT, there’s not much danger of paying it if you’ve hocked your house.

You can spend the equity of a house whilst alive by using equity release and reverse mortgages, leaving not enough for care home fees.

Those people usually own houses that can be used to cover care home fees.

Until they spend so much to avoid inheritance tax that they do not leave enough for their care home fees and so the state will have to step in.

Surely spending money in retirement is exactly what pensions are for? That’s the entire rationale for having them. People with money spending it instead of hoarding it benefits the economy.

Personally a 40% inheritance tax is simply too high.

Wealthy people will do everything to give away their money and assets whilst alive, set up trusts, spend it in retirement or move abroad to avoid paying almost half to Rachel. This will have the adverse consequences of people not being incentivised to work hard a build up a pension or spending too much in retirement and ending up with not enough assets so that the cost of care falls onto the state, or mobile high earners simply moving abroad with the government losing their tax dollars.

If inheritance tax were set at 10% with a lower nil rate band, I suspect the inheritance tax take would be much higher because the incentive to avoid is less. 10% seems a fair amount and probably not big enough a chunk to bother taking expensive, risky and onerous IHT avoidance measures.

Abolishing inheritance presumably means a 100% inheritance tax.

Nice. I am imagine no one is going to bother to gather up the estate for probate if that is the case. Let the government go rifle through an old person's house for bits of bank account statements and paperwork.

There will be lots of assets sitting around unclaimed. Which is a waste of capital.

I can.
I worked 60+ hours/week for a 3 decades all in top tax bracket. I intended to continue doing so for a number of years until Labour October budget. I wanted to pass as much as possible to my ND DC.
Posters like OP and some other on this thread might be very happy that pensions are now part of IHT. But this is exactly what was the last straw which pushed me into retirement.
If pp doesn't want to work more for her DC to have a house like she said up thread that's absolutely fine. But than don't ask for those of us who do to give up our wealth planned for our DC so her taxes can be reduced and her services improved.

I don’t think you can credibly accuse someone with a part time income of more than £50k of “not working much”, particularly when you’re planning to retire 15 or 16 years before retirement age.

Not at all @wipeywipe

I'm retiring at 52. And this is all because I don't want to fund the state anymore being in the highest tax band.

What does enrage me though is people who want to tax everyone else, like you want to do with inheritances, whilst not working much themselves.

By all means sort your life out the way you want, but don't say that those better off than you are have to pay more.

This is really going to enrage you @nearlylovemyusername but my state pension age is 68. I'm not planning to wait till then to retire, same for DH! 😱