Labour should increase inheritance tax to 50 per cent

Sorry, got that the wrong way round - pre-March, pension pots were subject to income tax but not inheritance tax. Now they are subject to both.

What like an apple?

My savings aren't a tree for anyone to eat the fecking fruit off.

No it is a million in most cases for a couple who are leaving their house to their children/grandchildren. So many people have not heard of the residence nil rate band.

(NRB @ £325k + RNRB @ £175k) x 2 = £1m

Wait I’m lost, why would your brother have to pay it with a small estate but not you with a large one?

I think rather than permanently increase IHT, there could be a one-off modest increase for those aged 60 plus today. Not because I believe in IHT, I don’t because the money was already taxed once and people save for their families to benefit.

However, I think many of this particular cohort are sitting on the largest amount of dormant cash in history and what I think it would do is incentivise many of them to spend big. Most people would rather enjoy their money than have it go to the government when they die.

This would unlock a shit load of money into the real economy, generating growth rather than going to the government to waste.

But those “wealthy southerners”’ kids will need those “housing windfalls” to pay their housing deposits to continue living in the south. It’s not like much of the money is kept as liquid cash for very long. Unless you want them all to move north and use what’s left of their inheritance to displace your kids from the local housing market?

It's 650, not a million.

Do our kids have to move up North to even things out a bit too when we die? Leave the place they grew up in?

The housing cost for them staying in their own environment means they would have to if we do what you suggest.

I've just watched the threads on an employment tribunal case in Fife where the public sector has spent 250,000 on lawyers defending stupidity.

So no thanks. A lifetime of work and saving, 250 IHT and boom, lawyers get the lot for arguing stupid.

The waste is staggering. The public sector has absolutely no concept of value or worth.

30 years of economic chaos.

But you do get taxed double - first income tax and then VAT when you spend it. And while it's sensible to ensure you have savings, spending money does keep the economy going and pays people's wages.

When I die, I imagine I either will no longer exist, or won't GAF about $ anymore.

My DC have the advantages of having parents who can afford extra curricular, days out, decent food, sports, holidays, stable housing, etc etc etc. When older, university, potentially a deposit for property, absent guarantor, etc.

Should they really get more advantages from a big inheritance?

Why should they financially suffer if I need a care home later? Or gain by discouraging me to access adequate care when I'm 90?

There is something very unfair in inheritance. I will inherit from my parents, whilst DH financially contributes to his parents. Neither of us are better than the other.

We are not necessarily wealthy, the houses are so expensive

Following the changes Rachel Reeves announced in March, our daughters will have to pay both inheritance tax and income tax on their dad’s pension pot. Before March, they would only have had to pay inheritance tax.

Presuming that they’ll both be at least in the 40% tax band by that point, that means his £1 million pension pot will be taxed at 40% twice. So rather than getting £300,000 each, they’ll only get £180,000.

Dear God OP can you please clarify that your proposed IHT increase from 40% to 50% also includes the existing thresholds as many pps here are going bog-eyed at the thought of any inheritance received or given is taxed at 50% with a zero threshold.

It makes a difference to my vote - no thresholds and an IHT rate of 50% YABU, retain the existing thresholds of £325k/£650k and increase IHT to 50% YANBU.

Inheritance tax is not going to make rent or energy more affordable. It won't protect individuals from greedy corporations or shareholders.

@Pictishblue My post wasn't trying to represent actual tax thresholds so don't bother doing the maths! I was just thinking about why so many people feel it's outrageous to tax people's unearned income when it comes in the form of inheritance, and wondering whether it's because they see it from the perspective of the person wanting to pass on their money and not from the perspective of people receiving a windfall.

Well my parents worked hard too but I grew up in poor town in the North and our family home, even thought it was in a nicer part of town, is going to be worth around £200k max - plus most of it will go on care fees anyway.

I work my socks off and am very much a net contributor, so it feels unfair that peers who today work part time, if that will receive the best part of a million for having parents who lived in the right bit of the country.

I don't see an issue, frankly, with asking wealthy southerners to share their housing windfall to subsidise the schools and hospitals, we all use and even things out a bit.

I hope to be able to leave my DC something but I won't mind if a good chunk if it went in IHT if I was fortunate enough to save anything like that.

That probably won't be an issue though. Currently IHT is only paid on the bit of your estate over £325k. However most people with estates of up to £1m (if most of that is housing) will be able to avoid the tax, due to the various allowances between spouses and breaks for main homes etc.

LOL no!

To avoid a functioning estate being broken up on death.

Which is what this government have just done to farmers by the way.

But actually most people's wealth is tied up in houses and in any event you're looking at 14 years before being entirely free of the PET (7 year long shadow...not just 7 years as a lot of people think)

If it's roughly the same, the why do it?

I think that's just what we are told to make us think that they are not so different, and not paying less than their share.

400 billion pounds worth of social housing in London is occupied by foreign households.

So no thanks, I'm not interested in the government taking money from my sons to provide someone moving here from another country a house.

The social contract has been broken in this open border economy.

Those joining the economy now can pay for themselves or those of you that want to can pay for them.

It’s not even double tax, it’s more like quadruple or more tax, because they keep taking bites of the same original chunk of money.

Oh look another goady thread where the OP posts a ridiculous op then disappears

Only a few years ago, there were threads where multiple people Saif they would be happier to pay more tax (not IHT but NI) for better services.

Where are the better services?

Well then you're penalising families with 1 child vs two or three.

Why should my 200k by taxed because I budgeted for one child and your 200k be exempt because you had two?

I’m pretty sure we could fund things if everyone paid what they should. I’m a landlord, whenever a tradesmen works on my home he asks if I want the invoice to one of my rental properties. No I don’t.