What do you think of Burnham's plans re inheritance tax?

[JoyousOpalLemur]

He has said in the past that he wants to abolish inheritance tax and replaced it with a social care levy on inherited assets, which will incorporate unused pensions.

I don't totally understand this if I'm honest - I think it means everyone will be dragged into the inheritance tax threshold, but it seems like a fairer tax than what currently exists, and it's there for a purpose (to fund social care).

What do you think?

https://www.independent.co.uk/money/burnham-prime-minister-money-taxes-mortgages-bonds-stamp-duty-b3001078.html

It’s worth noting it’s not necessarily the elderly that are against this
Its their children not wanting to lose inheritance

I think young people would prefer a functioning health service…:

It’s disgusting isn’t it. It was something that Queen Elizabeth arranged with John Major who got a knighthood afterwards. It wasn’t necessarily linked but I wonder what would have happened if he hadn’t facilitated it.
This exemption meant Queen Elizabeth inherited the Queen Mothers private estate without paying any inheritance tax and that her private estate and that of King Charles and then Prince William will also be except.

They also only pay capital gains and income tax voluntary and dont have their finances properly audited by HMRC - it shows what type
of people they are. They are the greediest and biggest hypocrites in the country.

My estate will be subject to inheritance tax and while I will try and mitigate the amount I pay I won’t do anything dishonest.

In principle I agree with inheritance tax as it encourages the transfer of wealth from the older generation to younger people.

It should be simpler and it shouldn’t be so easy to find ways around it. We currently use the regular payments from excess income to reduce our estate.

I think it’s reasonable and I say that as someone who will probably be impacted when MIL dies. I suspect by quite a lot.

However as well as raising taxes he needs to get a handle on the welfare bill. I’m all for supporting the elderly, the genuinely handicapped and sick people but the spiralling costs of people playing the system I’m sick of.

Couldn’t the £25k tax be withdrawn and paid by the solicitor to the government or HMRC before the assets are paid out?

But that’s the unfairness of it. They may already have paid a fortune in care, then have to pay 10% of what’s left, and surely they still are subsidising those who don’t pay for their care?

Then the spousal exemption should still remain!

Some seem to think 20% isn’t much - it is on an estate worth £500,000! Would care homes be willing to wait till probate etc is sorted before they get paid from the assets? Could be a long time!

Nor do I. It’s a colossal cheek that people can’t do what they like with their own money, gift tax, deprivation of assets etc.

Currently The bill must be paid before assetts are paid out and before probate is even issued

Its always been an issue if people don’t have the money to pay
but
there are banks that will loan and if your credit is bad theres a Govn scheme to borrow the money

Solicitors can’t be expected to pay. I think that’s unfair
the bill is not There's to foot even temporarily

how is it different to income tax? I would really like them to raise the frozen tax bands so I could keep more of my money!

You mean 10%

care homes won’t have to wait
they'll be paid straight away because people die every day and there will therefore be money coming into the Govn coffers

That’s a policy cross over issue

much like the unfairness of Burnhams LVT policy if you’ve already paid stamp

This suck it up idea needs to be tackled
People shouldn’t have to pay twice

Interestingly the people most in favour of inheritance taxes (social care aside this is a more general thing) are those most likely to lose out because of said tax. It's an often talked about phenomenon because it clashes with the self interest theory about politics.

It's also sort of irrelevant whether the children are bothered by the tax or not. The theory put forward was that people would "spend the bloody lot" before dying so as to cheat the taxman. That's not an action a resentful future inheritor would be doing rather the supposed actions of the older person trying to avoid the taxman taking a portion of their estate posthumously. It's also worth noting that such an action wouldn't benefit the younger inheritor at all, whether they liked or disliked the policy. So it is a "burn it all down" response.

I’m guessing people who spend the bloody lot
if they have children
are perhaps giving it away to their kids whilst alive or
putting property in their kids names to avoid paying the tax

We know that happens

Those without kids might blow the lot on other stuff of course

( but
once we reach pension age the Govn now has access to our bank accounts )
big brother eh

They won't because it's taken on death. So yes it's out of their estate, but it's the people inheriting who lose out. But those people win on the long run if the social care problem is solved.

I'm in my late thirties. In thirty years time I could be fine or I could be very vulnerable and in need of care. The current system is already creaking at the seams and not going to be there when Im retired. That's all regardless of the fact I work very hard full time and pay tax now. It's just the reality.
I'm happy to "lose out" on a portion of inheritance from my parents (horrible to think about anyway and it's all unearned money) if it means that there is some semblance of a functioning social care system for them when they need it and for me when I need it.

10% would be a significant sum
on my parents estate but I have dc so would rather a better functioning society.

That's exactly how I feel!

It’s like the bonkers housing market, far better for my dc to be able to buy a cheaper house when they are young rather than waiting until I die and inherit money.

Realistically the majority can’t do this because the money is tied up in their home.

People avoid IHT because it’s a lot more than 10%, setting up trusts etc isn’t free so far more will chose not to avoid the 10%

Yes this is what is so disgusting about the whole thing

Agree
although people do transfer their homes into their kids names

the kids are then liable for cgtax once they try to sell though of course

A lot people don’t even understand the threshold for IHT can be as much as 1million

Agree
and the interest if you borrow from the Government varies every year
they treat it as a debt and charge in most years well in excess of 20%

For a couple passing on to their kids
Not a single person