Inheirtance tax of 10%

First 10k exempt e.g. to cover funeral costs.
Balance at 10% .
Phased payment allowed in the case of hardship, or a charge on property until sold or next inherited.

Or, they could do like other countries and tax the beneficiary rather than the estate.

I wonder will there still be reliefs for business and agri assets. If they still exist that is!

Dividends are on AFTER TAX profits, so the company has already paid up to 26.5% on the dividends being paid, then another 10.75%/35.75% on the dividend. There IS virtually no difference anymore. In fact, some are now worse off being a limited company which is why I've been transferring some clients back to being sole traders and closing down their limited companies for the last year or two. We're also not setting up new clients as limited companies anymore unless there are other reasons i.e. where a limited company is required by the regulations of supervising bodies etc.

You’re so sure in your beliefs. Try widening your mind to other possibilities. You may surprise yourself.

There’s virtually no difference?

Dividend tax is currently running at 10.75% up to £50k and 35.75% up to £125k. I could have sworn PAYE is 20% up to £50k and 40% up to £125k. That looks like quite a big difference to me, especially in the lower bracket.

Which hasn't been the case for years. It was Gordon Brown who caused it in the first place. Successive governments have chipped away at the differences and now there's virtually no difference to the average self employed person whether they are a sole trader or limited company, even moreso with Reeve's 2% income tax hike on dividends (remember "no income tax increases on workers" - well that's a like because lots of limited company owners are workers, such as electricians, plumbers, etc, who may now end up paying more tax than if they were unincorporated sole traders).

I never said I didn’t believe in fairness.

You didn’t have to, it’s obvious from your posts.

I never said I didn’t believe in fairness. I happen to believe that good policy making should consider other things alongside fairness. The CGT raise is not based on common sense.

They’re better policies than those which set out to be blatantly unfair. You don’t believe in fairness, I do. Maybe we should leave it there.

Life isn’t fair. Policies that focus on fairness do not always make for good policies.

Your friends parent could easily have foreseen this issue by selling one property and putting the proceeds in the bank to pay IHT. I very much doubt that such a wealthy person has not done any estate planning - and don’t forget your friend will have been handed enough money to set them up for life without having to lift a finger for it. I imagine your friend is already pretty wealthy if their parent was so rich anyway.

Perhaps you should ask someone earning just over £100k who is paying effectively 60% tax on some of their income if they think it’s fair that someone whose income is multiples of theirs pays proportionately less tax. Fairness isn’t about benefit to the treasury.

Why is it a gross injustice? If it raises more money for the treasury why isn’t it just common sense?

No problem @BruFord . I do get quite exercised when people who have clearly always spent their entire career in the public sector with the full index-linked pension plan start to opine about taxing pensions as part of the estate for anyone who had to save it from scratch.|

@Papyrophile I wasn't commenting on your posts at all, I haven't fully read them! Sorry if it came across like that.

I was simply responding to @OneMintBear's statement that most wealthy people don't try to avoid IHT. I've assumed that the wealthy do use certain tools like trusts and wanted to know whether that's the case in @OneMintBear's experience? I don't think it's wrong to do that btw, people in that position will have paid huge amounts of tax over their lifetimes.

@BruFord while I would like to be UHNW, I'm quite a long way short. But everything we have, we earned, working for ourselves. There has not been an employer to chip in since 1990. No sick pay, six weeks maternity leave at £98 per week, no childcare subsidies. The system has left us to fund our own retirement plan, and we did, so do please allow me to be a bit salty about the Chancellor's decision to bring pension savings into estates.

@OneMintBear Interesting. I've generally assumed that very wealthy people put large sums into trusts for their children/grandchildren, for example, and those can be exempt from IHT under certain circumstances. Isn't that the case?

I'm not saying that these are vast lengths, but it's unlikely that less wealthy people would do this as they'd lose access to that money (and most people can't risk that in case of care home fees, etc.).

It didn't quite work like that with me, because I was never a company, and my accountant was an Enid Blyton head girl. But her clients were never investigated. Sue was ultra-squeaky clean and legit.

Precisely. We all know the old self employed dodge - very low salary and the rest as dividends.

Don't answer: I do know!

Dear @BIossomtoes I went self employed in 1990. What is PAYE? I have not been employed since then.

IMO, 22.5% tax take of a significant income is better than nowt.

The same rate as PAYE would be even better.

It won’t be taxed until you’re dead. I really don’t give a stuff about tax on our estate when I’m dead. At current rates our kids are on track to get £250k each tax free and 60% of anything over that. If that’s not enough for them we’ve definitely parented wrong.

IMO, 22.5% tax take of a significant income is better than nowt. We might all think they should dob in a bit more, but until politicians are ready to fight a big fight, it won't happen. We are modestly well to do, having started our own businesses in our 30s, bought a house and saved into a SIPP under well-publicised and understood rules.

In October 2024 RR stood at the podium and ripped our retirement savings plans apart. There are no DB pensions in our world. Nothing is index-linked. We were self-employed from the early 1990s. Everything in our pension is money we contributed and a grateful government added back the tax, happy that they were not on the hook to pay our pensions. So from next spring, it will be included in our estate, and taxed. I cannot begin to express the rage.

One might but one would be wrong. Why should someone on minimum wage pay 20% income tax with another 8% NI when multi millionaires pay 22.8%? Gross injustice one might say.

The treasury has looked at increasing CGT on a few occasions but have advised against sharp increases due to projected falls in revenue. That said, the left are desperate to increase it to be ‘more fair’. Playground policy making, one might say.