CGT on assets Inc primary residence at death

Well in my town 8 out of the last 10 houses sold would have paid it! More and more very ordinary homes especially in the south east will pay it.

im a London so fully aware of discrepancies in house prices…

....and the elderly who don't work but live on an enhanced state pension - there are enough threads aleady on this so just ignore me...

Well in my town 8 out of the last 10 houses sold would have paid it! More and more very ordinary homes especially in the south east will pay it.

Where do I say they should?

I am saying everyone needs to pay more, if we want the services.

Why is your proposal better than lowering the IHT limit, OP?

At present, various assets have tax exemptions - pensions, primary residences, ISAs.

The number of estates with significant assets not in one or several of these (eg large stock holdings not in an ISA) must be a fraction of estates over the current IHT limit.

So why isn’t lowering the IHT limit simpler and cleaner and more lucrative to implement?

When I bought my first house in 1986, average house prices were about 3x earnings they are now nearer 10.

So firstly you didnt need the bank of mum and dad as a first time buyer and secondly when mum & dad died the relative amount you inherited was nowhere near as big as it is now, OK picking up a lump sum of a year or twos pay wasn't to be sneezed at but it wasn't life changing.

Oh & dont forget final salary pensions as well.

In the meanwhile however building costs have risen roughly in line with inflation

Disciss.............

Plenty of people care for older relatives and don’t inherit anything though.

Most inheritance comes from property wealth and that’s mainly the result of a distorted property market and economic policy that boosted assets.

But it may not necessarily be money we get for doing nothing. Many of us spend a lot of time caring for our aged or infirm parents. It’s not the money that we do it for, but it is still tiring and stressful. Furthermore, my family wealth overall came from all of us working hard to build the family business. So it isn’t always possible to distinguish family wealth from income.

@Didyousaysomethingdarling I am aware of that. I mentioned the 1m threshold in a response to a poster referring to her parents and that the threshold was very low.

I don’t think 500k is very low either, very few estates pay IHT.

My comment was in response to your dc being made homeless.

I believe there is a loan scheme in place for this situation - which would then need to be repaid when the house is sold (or if not planning to sell then the kids could take out a mortgage).

And that is the uncomfortable truth….its not just the higher paid that need taxing more to provide more money for public services, it’s those at the lower and middle end. Because it’s the only way that the government can increase raise enough money now and over the long term.

Sure, you can keep putting up tax on the ‘rich’ but there aren't enough of them to provide the level of tax required. You can try and target the big multinational businesses, but there are global agreements in stuff like transfer pricing and profit shifting, so that’ll take longer and raise less than you think. You can try a wealth tax, but again while it might provide a short term hit the long term effect is a continued hollowing out of the tax base.

Everyone needs to pay more to fund public services, and that means people earning between £30k and £100k as well as the ‘rich’. It means that IHT should be paid by all, not just those with a larger estate than whichever poster is opining at the time. That’s the choice we face..and so far, the electorate have not been in favour. As to them ‘rich’ is always someone else, even if they earn twice the average income. However, they’ve voted in a bunch of politicians that have very particular definition of what a working person is, and it’s not even someone on average income, so brace yourselves!

The other option of course is to grown the economy…but the government seems to be considering policies that will have the reverse effect.

I know that @Fluffypuppy1 however they are getting a stellar deal - why is this? Who'd have thought it, very rich people protecting their assets whilst the serfs get taxed more and more. Close the loop holes and renegotiate the whole financial setup of the RF. Then tell us we need to pay more tax.

No, they moved house

@New2thisshizzle
If you’re not married or in a civil partnership your inheritance threshold is only £325k or £500k if you include your home. Lots of middle class ‘holier than thou’ mumsnetters with good pensions, don’t realise how tight things are for low wage WORKING people with no or very little pensions. They presume everyone is married with a £1 million allowance. As she mentioned her kids will be fine.

Any money in a trust has to pay the government 6% of the total value every 10 years. Also any money taken out of the trust is taxed at usual UK tax rates. It’s not some kind of freebie piggy bank or everyone would do it.

At 18 and 20, in full time education, where are they going to find £40k? Which they will have to pay HMRC regardless if the house is not sold?

Thank you PP for clarifying that there would be a payment due at inheritance (please note to poster saying how it would affect grief etc etc)… just that you inherit the asset at the value it was BOUGHT, meaning you carry forward the tax due on any gain. Otherwise you’re essentially writing off hundreds of thousands of pounds of wealth that would be taxable in most other circumstances.

It’s a fundamentally unfair way of doing things, though. You could have a situation where someone lived in a flat now worth £100k but which they bought many years ago for £1k - their heirs would have a CGT bill to pay, assuming the property was sold straight away. Yet another person who bought a house two days ago for £900k and then died and there would be no CGT bill if the property was sold straight away.

If you’re single your allowance is £500k. If you die your kids will be made homeless to pay the inheritance tax of £40,000.

What do you mean @Didyousaysomethingdarling?

This. It needs to be indexed linked.

Why would your kids be made homeless? If they are children, then they would need to be raised by someone else - other parent, grandparent, aunt, Foster carer. If they are adults then they may well have already moved out and be living independently. Or if not then once the property has sold they each have a £230k deposit for their own property.
I agree that changes to stop the process of paying IHT before property etc is sold and allow for a period of time to avoid grieving families having to make difficult decisions, moving etc in the immediate aftermath of losing a family member would be welcome.

No, no, and no.

There is an ever decreasing population in the UK paying income tax, and going after income tax doesn’t tax wealth, damages the middle classes and doesn’t make a dent in what we need. Additional rate taxpayers have many ways of avoiding paying it - pensions and the like, working fewer hours, and ultimately they are the cohort who are more likely to up sticks and leave

Frankly we need more people paying income tax further down the scale. I do think that main residence should be exempt from inheritance tax and CGT. We can’t keep on squeezing the ever decreasing pool of higher and additional rate taxpayers.