Anyone else now falling into possible inheritance tax territory?

[YumiZumi]

I don't feel rich but I will be dead rich!

Big mortgage, high childcare costs so things are tight but if DH or I were to die, then if the second we're to die soon after - our mortgage would be covered by life insurance, there'd be one death in service (presumably the second death in service wouldn't be part of the estate?) plus our current pension pots which don't seem that large. (Or large enough to give a so called comfortable retirement)

All comes easily to over a million. Yikes!

My bank balance tells a very different story!

This will hit women whose husbands worked in jobs which meant they couldn't help much at home. Like the navy or the police, or a lot of health.

Farmland might theoretically be worth £1M+ but they won't have loads of cash lying about. So if farmers' families end up having to sell then it means we have an even worse food security situation.

Grabby and daft. Ripe for manifesto promises to be overturned at the next election.

I read somewhere that many people think they will be hit by IHT but in fact they won't. It's predicted that it's around 7% of the population with these changes, previously was 4%.

If you are married and 1 of you die then no IHT will be paid between spouses then the threshold rises to £500K when you leave your estate to your children and that may well have been increased by the time that comes. I thought the biggest difference was to farms and land now getting hit with IHT and some pensions.

That rather depends on your meaning of signifcant. Supporting 2 children for 18 years is, I am led to believe, not cheap.

It is 6%, not 10%.

It’s not something I can get worked up about. Elderly PILs are main lining their money into paying for their care, quite rightly imo, as will be the case for more and more of us. How much, if anything, remains thereafter is unlikely to hit IHT for most of us.

@scaredysquiggle I don’t understand how the six months to pay IHT rule works. How do the beneficiaries come up with the money if they don’t personally have those funds? Can they take out a special type of loan?

What if the deceased’s estate has enough money in the bank to pay the IHT? Does HRMC deduct it before probate is granted?

I have cousins who went through all sorts of shenanigans to pay the IHT on their aunty’s estate a few years ago. I don’t know the details, I just heard that it was a nightmare.

Thus

@YumiZumi

Hey there, happy to set your mind at rest.

You don't pay inheritance tax unless you die, silly!

So no, you're not affected.

Yes am worried about this - mainly going to be an issue if my cancer comes back at stage 4 and die at about 52-60 and then not only will I never get state pension I've paid into 40% over threshold will go in tax and one of my children is disabled and will need support for life. I am terrified for his future without me and previously was comforted by at least I could provide for him. He's so vulnerable being non-verbal. And families were both parents have cancer and die young leaving children also badly affected. It looks in our case like maybe best I leave things to my husband and hope he lives longer than me.

It really is the scummiest tax going. You work hard after paying tax all your life to provide a better future for your kids and then it gets taxed again.

@Penguinsa

So sorry to read. I wonder if Macmillan or similar could advise you on setting up a trust for your DC?

It really really isn't.

The difference between those who inherit and those who don't is a poison on society that gets worse with every generation. And I say that as someone who will likely inherit and whose parents inherited.

I am very sorry to hear this. Would you or your estate not be able to put funds in trust for your son?

Which, with assets of over £1 million does make you rich. Or at least in the top 2.5% of people who died according to HMRC.

Yes, the 1% are going to be way richer than you (the 1% starts at around £2 million), but you'll be up there in the top 2.5%.

Iht? No such luck.

Hi. @1990s

I think part of the problem is the cost of property. My mum and dad bought their first house for £17k and went through years of super high interest rates. Back then, the thought of a million pound estate was the preserve of the properly wealthy.

My house, I bought for for £175k, 15 years ago. We have renovated it and extended it and it's now worth a staggering 750k. If you'd have told me when I was younger that I'd live in and own (almost outright at 45) a three quarter of a million pound house, I'd have imagined it would have been because I was a pop star! Not because that's just the way prices went. So now, lots of ordinary people do have estates worth nigh on a million quid, or even more and yet they aren't pop stars, just a generation apart.

Where did I say my pension contributions, I will have my pension taxed.

I could of course not bother with savings, pensions, sell my house and gift a shed load of money to my kids and then not pay any IHT.

IHT was brought in for the landed gentry, yet now people mostly living in the SE are hit.

If you are worried about unearned wealth not being taxed, do you think that when you move up the property ladder, you should be taxed at 40% on the equity?

May promised The Daily Mail readers to sort it out but she didn't.
The whole last 14 years has been Tories fighting among themselves talking shit and wrecking the country.
Inheritance Tax really isn't a problem if people just plan to hand their assets over in time.
It's when 2 generations die close to each other that inheritance tax really stings.

You had an unprecedented 5 PMs in 14 years and you think one of the fuckwits that's up for leader now is going to be a saviour?

What a silly ill informed comment.

Also ageist, give your head a wobble.

You also have no idea how old I am or what sort of life I have to make such a sweeping statement.

The wealthy don’t pay IHT as they can tax plan. Personally I’m going to be passing on as much as possible to my kids when they need it, early in life rather than waiting until I die. That gives them a better life hopefully and will avoid IHT provided I survive seven years from the gift.

Yes. It doesn’t bother me. The DCs will still get a decent wedge each even after IHT has been paid.

Completely agree that the massive increase in property prices is a big contributor.

A) it's unearned those who benefit, so I have no problem with it being taxed.

B) It means that buying a property in many areas is next to impossible for those who don't inherit if they're on anything close to an average salary. So the divide been those who do and don't inherit only grows.

Most money gets taxed multiple times, surely. Why the outrage over taxing unusually high inheritance?

I don't get to stamp around the high street refusing to pay VAT because I've already paid income tax.

Thanks! So probably works out more in line with the 40% once every generation, taking into account growth in aset value and income tax receipts. Makes sense :)