To not see the problem with inheritance tax

[AgaPanthers]

"Millionaire lingerie boss Michelle Mone has called for inheritance tax to be axed to stop the government spending her money when she dies."

Surely it's better than the government spending her money while she's alive? I mean they have to get their hands on people's money one way or another, and if anyone doesn't need it, it's the dead.

"I work really hard every single day - like a lot of people - for my children and for my children’s future,’ she told BBC 2’s Newsnight.
‘I want them to have that little nest for their future and for their children, and I don't see why I, others should work extremely hard, pay your tax and then when you die it is like a double whammy."

I work hard for my children too, so that they have a good education and can make the most of their talents. But I don't really see why my grandchildren, for example, would need to receive my millions (if I had any!) untaxed.

Others seem to feel the same way, giving to charity www.news.com.au/finance/work/tycoons-who-wont-give-money-to-their-children/story-e6frfm9r-1226702468883, rather than enabling several generations of progeny to be idle wasters.

For the record, the IHT rate is 40% above £325k, but for a married/civil partnered couple, the allowance is transferrable, so a married couple can leave £650k (which is 32 years labour at the average wage.) entirely tax free to their children.

[formerbabe]

When I say young, I mean late teens/early twenties. An age where many young people are still living at home, maybe at university. When you are 'older' and married perhaps and living independently, I can see why IHT wouldn't be such a big issue.

I actually needed every penny to 're-home' myself. Please don't forget, if I lost everything, I have no fall back net, wheras people who still have parents alive, have a place to go if they lost everything or had a crisis.

[Spherical]

Sorry, Teeb my post was very crass following after yours but I hadn't seen your post before posting. I am so sorry that you are having this worry to add to all the others that you must be going through.

[Bearbehind]

TBH spherical your post has been blown out of the water by teeb.

I truly can't imagine what you are going through teeb but I hope you can find some solution which gives you peace of mind for your sister's future.

[traininthedistance]

Woowooowl People should be able to do what they want with their own money and their own property, and that is exactly what IHT affects

But it doesn't affect that person. It's a transfer tax levied on the recipient of the money, not the dead person whose money it was. It isn't the beneficiaries' money, is it? It's a tax on the capital gain of the beneficiaries.

[HercShipwright]

formerbabe I was young when my parents died too. They didn't have a home to leave me. Or any money. Everything I now have, I've worked for. Every single thing. I know couples who have inherited 4 houses (both parents split, then bought property again on remarriage) who have achieved far less in life than me, pay far less tax (on basic rate) and yet are rolling in it due to their masses of inherited capital (hundreds of thousands of pounds). How can this be fair or right? It's not. IHT should definitely be 100%. People should, insofar as possible, stand on their own two feet and prosper through their own efforts, not through accident of birth.

[Teeb]

I do believe in inheritance tax, but only on income. No one should be forced to sell a property that is a home or a painting because it has an imposed value. If the benefactors choose to sell and cash in these gifts, tax them at that point of sale. I don't have an objection to taxing instant cash assets either.

[WooWooOwl]

I see it differently train, but it might come across as just splitting hairs.

I think it does affect me if I am told that if I die early I'm not allowed to pass what I have to may children.

I'm not the one actually paying the tax, but it's still my money that is going somewhere I don't want it to go if it's taken from my estate.

[Want2bSupermum]

Teeb I am so sorry to read your post. I can't imagine what you are going through. You should speak to a lawyer who should be able to advise you on how to set up your estate to avoid IHT. Accountants are not able to advise on tax avoidance.

First of all I think it is almost commical that people think that GBP300k is a substantial sum for an estate. Considering almost 50% of homes are worth more than this, IHT thresholds need to be reassessed. I think any estate more than GBP2-3 million should have some sort of charge assessed. The problem is that with a threshold at this amount, for an asset such as a farm or small business, you run the risk of the next generation not being able to continue the family business. This is not good for the long term health of the economy.

[TheGirlFromIpanema]

I think it's wrong. People are already taxed on their earnings whilst they are alive. Why should they be taxed again? We know people who have lost lands etc because they were asset rich but cash poor and it's broken their hearts in some cases

And again But all tax is already taxed as it were, apart from income tax.

VAT, Capital Gains, Road Tax, Council Tax, Stamp Duty, Fuel Tax.....

Teeb and that is a sad situation. Can you seek help now to mitigate in advance as it were? There are ways around IHT in your situation, a joint ownership of the property maybe?

[traininthedistance]

You might think of it differently, but the fact remains that it is legally and actually a transfer tax - whatever you consider it as!

[Bearbehind]

I think it's very easy to sit back and say things like They will already have had significant privileges wrt good education, middle class home full of books, all that gubbins. They don't need unearned inherited wealth on top when you presume you'll die at the ripe old age if 90 odd and after your kids have made something of themselves.

It's very, very different in a situation like teebs which is why one size does not fit all.

[formerbabe]

Hercship....Do you have children? Would you want them to be orphaned at a young age without a penny to their name?

[traininthedistance]

And you can pass whatever you like to your children - they just have to pay tax on it! In the same way that you can pass your estate to anyone you like. Why should children get preferential treatment - someone without (or with) children might feel just as strongly that they want their estate to go to a friend, relative or the local cats' home - IHT equally applies.

[Snowballed]

£325k without paying a penny of tax is a nice amount & certainly not something I'd turn down. Anyone who wants to avoid paying IHT can do so by transferring assets in their lifetime.

[GrumpyInYorkshire]

If you're going to tax anybody, best it's rich dead people rather than the poor and living.

[motown3000]

"Well Said Supermum" . Inheritance tax was set up to make the Richest 5000 families or so pay. The system with the £325/650K Thresholds has up to 1 Million people in in its potential sphere.

A "Great" idea of having different limits for different areas " The North should be Inheritance tax free" 3 Reasons, First Make People Move up North and Business would relocate , taking Heat out of the South East , 2. The North needs to be attractive to avoid movement South 3. There would be a flow of money and expertise out of London and the South East , ultimately reducing the North/South Divide. Radical ideas are needed , not policies based on Jealousy and dogma.

[formerbabe]

Grumpy in Yorkshire...my family were not rich! We just owned a house that increased in value.

[TheGirlFromIpanema]

Former no one in the realms of IHT would be left without a penny to their name

This discussion is going round in circles so I'm bowing out. There are some very real concerns by posters on this thread but it seems that the anti IHT posters will not concede an inch. I would fully support that deferment could be an option for those likely to lose homes.

No one has offered anything other than 'cut tax credits' or 'stop foreign aid' as an alternative. It doesn't take much to see that anyone affected by IHT on their estate wouldn't come into the realms of CTC and the other is just a daily mailesque line trotted out.

Teeb I honestly think you and your dsis will benefit hugely from some proper tax planning advice before it becomes to late. I wish you well.

[formerbabe]

That point was made with regards to someone on here suggesting IHT at 100%.

[GillTheGiraffe]

YABVU

Taxed when you earn it and taxed again on the same money when you die.

That's greed.

It isn't always possible to make good IHT avoidance planning. There are plenty of young people who die prematurely every year. They have no had the opportunity to do so nor should have had the expectation, at their age, that they would need to.

[SirRaymondClench]

Someone mentioned upthread that in order to avoid paying IHT they would gift their house to their child on their 18th birthday. Is that even possible? If you gave your child your house say 10 years before you died wouldn't the tax man come after you?

[roundtoit]

you will find though that the mega rich do not pay much IT as there are way and means to avoid it. The better the accountant and more expensive the the firm is the more "legal" ways to avoid it.

[TheGirlFromIpanema]

Ok. One more.

Gill - do you pay council tax? Greedy councils providing local services out of your already taxed council tax payments.

Do you drive a car - greedy DoT collecting road tax to keep the countrys roads moving - out of your already taxed money. Bastards.

Do you eat food? On which (unless your diet is very basic) you pay Bastarding VAT using money that.... wait for it... you've already paid tax on.

Does having amassed wealth of £300k plus literally remove a persons rational thought processes?

[HercShipwright]

formerbabe I do have children. Of course I don't want them to be orphaned young, as I was. I don't think they or anyone else should inherit large capital sums. I think that they should - as I had to - make their own way in life. I believe in equality, not in privilege. Of course, they are privileged right now because I am a high earner and so they have things that I could never dream of when I was their age. That in itself is an unfair advantage, they don't need any more. I'm confident my kids can do as well as I did. From a much better start, admittedly. They should do better, really. Are you not confident in your kids' abilities?

[TheGirlFromIpanema]

No Raymond they would not.