Does anyone else think that having to pay tax after you are dead is quite a nice ‘problem’ to have.

[Daisydurrbridge]

I am like most people and will never have the ‘problem’ of paying inheritance tax. So many people are fussing and fretting about this tax without a true understanding of the terms under which it will have to be paid.

In my working life, I often had customers complaining about interest rate falls because they had to live on that money. I am not referring to ordinary people but those who needed wealth management advice. The thought that they could spend some of their capital filled them with dread. Only having three cruises a year type of worry.

Once when we were at dinner with friends they were discussing their parents and they remarked a time when they were really quite poor and had to live on their capital. When I said “quite poor” means having no capital they could not comprehend it.

i wonder if I am so out of step.

All money is taxed multiple times. The estate pays - so effectively the beneficiary. These days the bulk of it is property price increase which nobody has paid tax on. If there’s no IHT all the wealth gradually concentrates in fewer and fewer hands.
If you are upset at receiving up to a million tax free and only paying tax on the amount above that, I think you are never going to be happy.

The country is broke though with an ageing population so the government will come for that housing wealth even if just by stealth. You need that op? NHS has a 3 yr wait. Carers in the home? There aren’t any available.

And housing is going to stagnate for some time with the higher interest rates.

Not if you own a house you don’t. The allowance for that takes it to half a million. A million if you were married.

Pension is supposed to give you a good retirement. Take it out and spend it. And I’m pretty sure someone on £25k isn’t going to hit that problem anyway.

The estimate is for 8% I think.

My thoughts exactly, why should my money be taxed because I died? I already payed tax on it, I also don’t want to be married - I should be forced into something I don’t want to do just because it’s a tax dodge.

I earn above the average salary and if I died tomorrow my son (11) would get a meagre amount of my estate due to IHT. But will have lost his mother.

I think that paying Inheritance Tax is only something stupid people have to worry about.

Anyone with half a degree of sense has already arranged their financial affairs so as to avoid IHT entirely.

You don't see the Duke of Devonshire protesting and he has 100 x more farm land than all those idiots protesting in Whitehall combined.

Any farmer with land should spend 90 minutes with an accountant and a lawyer. Problem solved.

My parents have worked tirelessly for over 55 years to build financial security, starting with nothing in council homes. Through hard work and determination, they’ve saved into private pensions, paid off their mortgage, and built a financial legacy of around £2 million, intending to support their children and grandchildren after they’re gone. However, under the current inheritance tax (IHT) system, much of their efforts risk being penalized.

With the IHT threshold frozen at £325,000 (or up to £1 million for couples leaving their home to descendants), any estate over these limits is taxed at 40%. For an estate of around £2 million, this means an IHT bill of approximately £400,000. Worse, from April 2027, unused pensions—previously excluded—will now be included in taxable estates. If pensions push the estate above £2.35 million, the residence nil-rate band (RNRB) is lost entirely. This could raise the taxable estate to £1.85 million and increase the tax bill to £740,000.

On top of this, my parents are now having to spend large sums of their hard-earned savings on professional advice and financial planning to minimize the tax burden, just so we won’t face an enormous bill when they die. I know I’ll get some abuse because I’m ‘lucky’ to inherit anything at all, but it makes me furious that so much of my parents’ hard-earned money will end up with the government. After paying taxes all their lives, why should the government take even more? These measures not only punish their hard work but also discourage saving and financial responsibility. It’s deeply frustrating to see policies that undermine the values of prudence and intergenerational support. So your to your answer, no it's not a good problem to have, especially when someone has worked so damn hard to earn it

Well it's all relative to one's experience. But I can't believe that any intelligent person cannot understand and empathise with people who are less well off. That they cannot appreciate that some people are worried about paying their energy bills, for example and can't even dream of going on a holiday.
When my son was 8 he said the parents of the kids at the state school must not be smart enough or not work hard enough to send them to the private school he attended. I pulled him up immediately on that thinking - but he was 8. Surely an adult gets it?

I earn above the average salary and if I died tomorrow my son (11) would get a meagre amount of my estate due to IHT. But will have lost his mother.

its 40% above the threshold so I’m not sure how that’s meagre.

My parents have worked tirelessly for over 55 years to build financial security, starting with nothing in council homes. Through hard work and determination, they’ve saved into private pensions, paid off their mortgage, and built a financial legacy of around £2 million

Surely a big part of building this wealth was having the security of a council house to grow up in?

So your to your answer, no it's not a good problem to have, especially when someone has worked so damn hard to earn it

My parents estate is over 2m, most of made by being lucky when buying a house. I don’t have a problem with paying tax on that. I’m still incredibly lucky and recognise how much inherited wealth entrenches inequality.

And loads of it could end up paying for care in old age. My parents are happy to contribute though so it’s not an alien concept to me.

Sometimes you just have to say it how it is

That’s what I thought so a million pounds and anything above is taxed. Seems quite a decent windfall to me and if I got 500k I certainly wouldn’t begrudge paying tax on the rest.

You're 'avin a larrrrf!

According to official figures, the average pension pot is approximately £37,000 at retirement.

That's at retirement! Most of that will be gone within a couple of years. But either way it's not going to be pushing that 4% figure up to a majority.

https://www.thetimes.com/money-mentor/pensions-retirement/private-pension/pension-pot-amount-average-uk-how-much

You disagree with VAT and council tax then?

Nobody chooses a wealth manager for they empathy, they choose them for their knowledgeable.

Paying 120K of IHT a few years ago when both my parents died within 8 weeks of each other didn't feel like a particularly nice problem to have!

I can appreciate it might do to some people though

One of the big things that worries me about inheritance tax is the amount of time you’ve got to pay it.

My in-laws are having a bit of an issue right now where a close relative has died, he’s left an estate big enough to mean inheritance tax is payable given the increases in property values since he bought his house, but there’s uncertainty and disputes about whether the will that was found in his house is valid. It’s all a big mess, right now no one really knows who the beneficiaries will be when all the dust has settled.

And there’s only 6 months after his death before the inheritance tax is due. That doesn’t leave much time to unravel the massive tangle this relative has left, figure out who should even be applying for probate in the first place, and then arrange to sell the property.

And frankly even if everything was straightforward with wills etc, 6 months isn’t a massive amount of time to get inheritance tax sorted out if property needs to be sold to raise the money, especially when the people responsible for paying the tax are grieving the loss of a loved one.

I’m not against the principle of inheritance tax. I don’t think my in-laws are either. There’s certainly worse problems to have than paying 40% of whatever part of the estate is above the threshold.
But the 6 month deadline for paying it is really stressing them out right now

I think this is all well and good, but you are assuming you will be at least as old as your parents when you pass away. If hypothetically parents of an 18 year old were to die with an estate worth more than £325,000, then that just turned adult is going to be in the most devastating position.
All those of us with children need to be insuring against this. I very much doubt that my children would be in any position do deal with the inheritance tax on our estate at that age, and having to sell the family home etc. would be devastating

This, and the IHT thresholds are fairly hefty.

Well I guess they meant they had no other source of income. Yes they are lucky they had the capital to fall back on but if they didn't have that they'd be entitled to benefits of some description, presumably, rather than selling their bodies or having to sell their home?

This applies to a vanishingly small number of people. Particularly given its only 4% of estates who pay anything at all.

This really is a non problem. I dont know why people go on about it all the time

I agree with you. However, I still think that the IHT threshold should rise every couple of years in line with inflation at least, even if not in line with house price inflation. It was designed for very rich people living in very large houses, maybe mansions, with lots of other assets. Not an ordinary family house. I am happy to go along with taxes that seem fair, but get irked at those which seem unfair.

No tax schemes should be introduced without some form of "future proofing" to factor in inflation, to ensure they stay fair.

Thresholds should be linked to inflation.

People should be given a year to pay it, I do get that for bigger estates there can be a level of complexity to unravel.

Other than that I agree 100% with you OP.