Labour should increase inheritance tax to 50 per cent

The problem with pensions not being subject to IHT is that wealthy people could just stick loads of money in a pension, fund their retirement using other wealth whilst leaving their pension pot untouched, and pass it on without paying any IHT. It's not really what pensions were intended for.

Tax avoidance is the route to go down. Let’s pursue those who are actively avoiding tax. More trickier to catch but potentially a lot more to be gained there than increasing IHT.

Plenty of businesses as well as individuals. The inland revenue should be working more closely with banks to id these individuals.

Exemptions should be put in place to protect small businesses;

Why?

If you're going to raise taxes, there should be no 'get out clauses' at all. There should also be taxes on Trusts (yes I'm looking at you Hugh!!)

Duke of Westminster avoids huge inheritance tax bill using legal loophole
Hugh Grosvenor was the 68th richest person in the world when his father died in 2016 and he inherited his £9billion fortune

But the then 25-year-old Duke was able to keep all of his father's estate worth an estimated £9billion, thanks to an inheritance tax rule which meant he didn't have to hand over a huge wad to the government's coffers.

Exactly - when my dad earned £1, he paid (on average) 50% tax on it, so kept 50p…then we paid another 40% tax on that 50p when he died, ie another 20p. So at the end, his family were left with 30p from the £1 he worked bloody hard for, whilst the government took 70p in tax. I think that’s enough, don’t you?

As I understand it if he is passing his house to his dc or dgc there is a cap on the IHT plus the 325k which doubles if a spouse predeceased him and they left him their estate. This can make the estate worth nearly a million before IHT is paid.

Can't remember the full details.

What loopholes are these?

Trusts have been subject to IHT for years.

Nope. Don’t agree at all.

first and foremost the party that abolishes rollover relief will get my vote. That’s an intrinsic problem to the cost of housing. Utterly ridiculous they left that alone whilst hammering farmers.

I think pensions should be exempt from IHT and I think families should be encouraged to leave money and build wealth for their future generations.

Presumably you mean exempt transfers? It's only a PET if the transferor dies within 7 years, after that it is just an exempt transfer.

And I wouldn't call that a loophole in any event. It's a cornerstone of the way IHT works. If you want to tax transfers made at any point during someone's lifetime then you would be fundamentally altering the way IHT works.

Ok, so I earn money and pay tax on that money.

Whatever is left after tax, I use to buy a house and pay SDLT, buy clothes etc and pay VAT.

Whatever’s left after that I save or invest, and pay income tax or capital gains tax on any profits.

Whatever I’m left with after all that, after the government has taken multiple bites of the cherry, I leave to my kids and the government takes 50percent of that?

What has been my actual tax rate on the money I earnt, when all those different tax hits are taken into account?

Nah, fuck off. If you raise the tax burden too high then wealthy people just leave, and you lose all of their taxes plus everything they spend on goods and services. It’s stupid and short sighted.

As long as they take it from everyone and close loopholes around personal /family trusts which aim to allow the very rich to escape this.

Most inherited wealth is unearned and untaxed - usually from the rise in property(ies) that was artificially created by government policy.

I'm okay with losing it - it reduces inequality but it has to be for everyone - and they can start with the Royal family and their ilk.

IHT is nothing to do with whether or not someone worked. Most estates that pay it (and it’s a tiny proportion, about 4%) do because the dead person had valuable property, often bought cheaply decades ago.

Great way to further incentivise people to leave the country if they possibly can! Why would anyone work hard and save in the hopes of a better lifestyle for themselves and their descendants if they know the government is just going to steal it If they die before they manage to pass it along? It would be robbing people not only of their hard-earned money, but also of any motivation to work harder to get ahead.

We pay enough bloody tax. Why should we pay more on property!

I haven’t worked all my life for just me. I have worked for my children and now my grandchildren. I’ve worked until retirement, paying everything that’s been asked of me, to support myself and my FAMILY. More than can be said for many.
All my efforts have been for all of us, since the day they were born to the day they die. So no, I don’t want great chunks of it to go in inheritance tax. I want it to stay with us.

Ah yes, of course, silly me…when he died, he ceased to have a family, of course he did….🤦🏻‍♀️🤦🏻‍♀️

potentially exempt transfers

You and your children are welcome

I understand why people want this, it's felt like it is a way of transferring wealth from the rich to poorer people.

But long term, it also looks like a way of transferring wealth that belongs to real people to the state.

I think the reason so many people are adverse is that even if they personally don't have enough to pass down to make a differernce, they can imagine how it would be if they did manage to achieve the amounts required, and then were not able themselves to decide what to do with it. Sometimes even more so with regard to things passed down from their parents, like homes or land.

Labour are unpopular enough at the moment. IHT is an unpopular tax even among those who will never be liable to pay it. It goes against that kind of ‘British value’ of working hard and providing for your family and the state not taking what you have earned, which is a belief that a lot of people, including Labour’s traditionally core voter base, have. I think they would be very foolish to do anything that increases IHT.

I don't misunderstand it. I resent the fact that the estate of my brother, a postman with a tiny house in the south east is having to pay it. As his house alone is worth more than 325k. How can that be fair when me and DH with an estate worth about 1 million, won't pay anything?

Not true at all. My joint estate with my husband is worth about £4 million and will be subject to inheritance tax. Apart from a gift of £25,000 from my father to buy my first home, the entirety of that is the product of extremely hard work. Now that my DH’s pension pot will be taxed twice thanks to the changes in March, our two daughters will only get about £1 million each. And you want to take more of that? What was the point of us working so hard all those years?

And there are hundreds of thousands of other hard working families who have inherited little, if anything, in exactly the same position as us. Work pays, if you choose your industry well.

Well according to @needtostopnamechanging , your father didn’t need the money any more as he was dead.

What a joke.

“..while avoiding raising taxes on working people”. Sorry, what?! Do you not think some people’s wealth came from working bloody hard?! My father worked incredibly hard for his family all his life, paying between 40 and 60% tax on his earnings, but still saving to make sure that his family would always be ok. It wasn’t his fault that he then died early from a brain haemorrhage - we had to pay a further 40% inheritance tax on that as my mother had already died at 42, & you then want to take even more of a cut from his family after that?! Yup, really fair….

It’s not taking money off working people it’s taking off people who are dead and no longer need it

and in most cases it’s taking money from dead people who never paid any tax on it because it’s money from the house that they bought for tens of thousands less than it’s now worth

rather that than they raise stealthy taxes everywhere else that affect the living

Twat it would Muller the working class who live in places like Bristol, London, Southampton who bought under right to buy. And why should people like me who grew up on benefits, grafted like fuck subsidise those who don't get out of bed because of 'me mental health '
Actually I don't give a stuff about inheritance tax but realise it's a disincentive to work hard, hits the squeezed middle and wealthy people avoid it anyway be exploiting loop holes

Name a “loophole on avoidance”.