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.

Agreed!

Anything with VAT is being taxed twice

Buying petrol out of taxed income you’re taxed three times.

It is what it is and the complaints about it make no sense.

No it doesn’t - they’re dead! What it does do is mean that those who have done absolutely nothing to earn their inheritance will receive slightly less. Someone who dies in their 80s is likely to only have a small pension pot left.

How could tax be due on half of their inheritance? If you’re leaving them your home, then the first £500k will be IHT exempt. They will pay 40% tax on the remainder. if your estate was £2million, they’d pay 40% of £150k, ie £60k, leaving them with £1,440,000

I agree this is an issue - and so I have life insurance so that there would be money to pay the IHT if I were to die, so that my kids can stay in the house

The income tax scenario is the same for salary sacrifice or net pay arrangement. You save NI though as does your employer. I expect this loophole to be closed in the next budget.

The point with paying VAT is it’s a choice

Well not really unless you’re incredibly careful walking round the supermarket. Does your hand hover over the Jaffa cakes desperately trying to remember if they’re cakes or biscuits.

Very funny
you left out a zero

If a family house/estate was worth, say 1.5m then the tax would only be due on the remainder 500k after married couple allowances. Obviously those allowances I'm sure will change in years to come, but currently would expect most kids could afford to re-mortgage over a long a period as necessary - say 30 years - to pay off the £200k due in IHT if they wished to stay there, I cannot see a bank failing to lend that given the equity even on min wage - but would they? I know many that have used the opportunity to relocate from London/SE to a cheaper area (and often easier) job with less of a commute.

The 'majority of people' don't pay IHT. It is a tiny amount of people affected

Career average rather than final salary but still defined benefit for Civil Servants. Nothing like Classic pension though

I know what you mean, I am unlikely to be affected by IT and neither are our DC BUT I will have to pay CGT on my Mums house when we sell it.
Me and my brother inherited it over a year ago and for a specific reason we can't sell it yet so will have a small amount of CGT to pay when we do.
My brother is furious at the thought and keeps coming up with all sorts of schemes to avoid it, mostly having being advised by "Dave down the pub".
I have taken proper advice from my Accountant and refuse to get dragged into any of it - in the next couple of years at some point I will be getting several hundred thousand pounds I didn't work for and never expected so paying a few thousand in GCT really isn't an issue for me.

I do think we’ll increasingly see it affect more estates though.

It’s not unusual for houses especially in the SE to be over 500k.

the aging generation next are less likely to be married, more likely to be single parents/divorced so won’t benefit from the marital allowance. A quick poll of my social circles I don’t think there’s many who have a long standing first marriage. Most are divorced, many on second marriages, those who are want to leave assets to kids not new partners, so they won’t benefit from the spousal allowance either.

I agree with it in general but doesn’t seem right that bereaved children say 18-21 that have still been living at home with a single parent have to sell their home to pay it, as per the example early on in the thread.

I will get v. little when my parents die but I think the shit childhood I had absolutely earned me an inheritance.

This is true. Also those of us in our 50s didn't benefit from cheap houses. They were expensive, bought with huge mortgages, only just paid off. We haven't benefitted anywhere near as much as previous generations.

Also those of us in our 50s didn't benefit from cheap houses

I certainly did & so did my peers who are now in our 50s, it was 3x our joint income. The same house now is £186k more than twice the average income

Housing was relatively cheaper in 1970s and larger houses were more affordable

Anyway my dps afforded a new 4 bed house

My friend had to take out a loan to pay IHT when her widowed mother died. The family home had to be sold as it was the only asset her mum had as she had stayed put when widowed. The interest on the loan was taken out of what she eventually got for the house when she managed to sell it almost a year later. It was an expensive process. This is why I am keen to downsize so my DC are not left with a large bill and no cash.

Just taking a step back, 'having to pay tax after you're dead' isn't the problem I have.

The problem I have is 'having to predict the future'.

Failure to predict correctly could lead to be me being robbed of the chance to use the money I've earned to help my own child, which is a fundamental human drive.

Failure to predict correctly could alternatively lead to me not keeping enough of the money I've earned to support my own needs. That's a fundamental human fear, which I want governments to reduce not increase.

The government shouldn't be either expecting us to do the impossible (predict the future) or forcing us to live our lives in a worse way, under threat of them robbing us.

I don’t understand this outrage at being taxed again. Most of wealth in this country seems to come from house prices increasing since old people bought their houses from very small amounts. That is not earnt income. And it is to the detriment of younger people. Of course they should pay tax on that gain.

And public sector pensions aren’t included as you don’t inherit a lump sum. The pension usually dies with you

My main issue is that people are paying tax on money that they’ve already been taxed on. It doesn’t matter if they’re rich, it’s unfair.

You need to factor that into your life insurance. If you're only insuring for a short fixed term, ie until they're independent adults, it should be affordable.