What are the Tories thinking with insane £1,000,000 inheritance tax threshold proposal for family homes?

[Figmentofmyimagination]

It's almost as if they have completely lost their way.

Cold, dark and too close to the white walkers.

It's amazing isn't it? They have plans to scrap carers allowance for people who don't claim universal credit which will mean 40% of carers will lose their piddly £63 a week for doing, in my case, a 24/7 job and because of the sacrifices I've made in order to care (ie having to give up well paid work) it means our income has been reduced considerably and we can't afford our own home because here they are so far above even a nationally high wage, that people struggle to buy at all. Not to mention I and millions of other carers save the economy millions!

Every party needs to look at reducing house prices, taxing those that have more than one home and stopping foreign investors buying up housing and leaving it empty. I also think interest rates need to rise in order to stabilise the housing market and those saving for deposits get a better return on their savings.

Instead they think it's a great idea to scrap inheritance tax up to a million! It speaks VOLUMES

My problem with this is that house prices are becoming inflated beyond all reason, particularly in the SE, and currently there is very little tax take on any of it. Stamp duty is payable when you buy, so the money for the tax on your first home has to come out of your already-taxed earnings or savings income (it arguably becomes a tax on the capital appreciation of your property once you're on the ladder).

In my opinion, IHT is the fairest way to tax the property bubble. The person who paid for the house doesn't have to pay any tax on the capital earned in their lifetime. It's a windfall for the inheritors, rather than earnings, so there should be no hardship in being taxed on it.

The difficulty in finding affordable housing is becoming more and more acute every day, and more families are needing to be housed with assistance from welfare. We should tax the gains on property to pay for these increasing costs.

I don't buy the argument about 'family homes' either - increased longevity means that most people are well into middle age by the time their parents die (assuming natural lifespans) which means that they're well established in their own lifestyles. My ILs were both retired by the time DH's grandma died. Who's waiting for their inheritance before starting their own family? The Queen and Prince Charles - and Prince William, for that matter - are an excellent case in point.

For most of us, inheritance is a 'nice to have' rather than an essential. I'd far rather be taxed on any inherited wealth I'm lucky enough to come by, than on my earned income.

Yabu. In the south east and London property prices mean lots of people fall into paying inheritance tax. Also it would only be raised to £1m if you're a,married couple, for a single person it would be £500k.

Why should someone in London have to sell their deceased parents family home to pay iht, whereas not in the north? Or do you want all London homes to be sold to wealthy Russians and Londoners all forced to leave in the next generation?

carrierpenguin, that only makes sense if in London it is normal for property to be passed down the generations, everyone living (presumably with their extended family) in their parent's house.

I think outside the royal family that is pretty uncommon.

Again, the conservatives could have restricted this benefit to people who don't benefit from their spouse's allowance, or they could have adjusted the rules to help dependents affected by iht, but they haven't.

"It is generally assumed that dead people don't need much money."

^^ this

I am 100% against removing inheritance tax for all homes under a million pounds. And that's despite the fact that my mum's estate is currently worth way, way over the current inheritance tax limit.

There is already enough inequality in relation to housing in the UK. Removing inheritance tax compounds this in a very significant way.

I don't know a single person who has kept the much vaunted 'family home' upon inheritance so far. All have cashed it in, divided the spoils amongst the siblings and upgraded their own home either by moving or extensions etc. In which case the amount inherited in the SE would far outstrip inheritance in the north so its not unfair at all.

The family home is simply an emotive notion to disguise that they are appealing to greed to buy votes. How clever!!!! Urm...not transparent at all.

"In my opinion, IHT is the fairest way to tax the property bubble."

Yes - and the tax revenue should be used to build affordable rental properties, to try to even out some of the inequalities caused by the property bubble.

"It is generally assumed that dead people don't need much money."

//\ Yes not much more needs saying about inheritance tax. It should be the most benign tax of them all.

I don't know a single person who has kept the much vaunted 'family home' upon inheritance so far. All have cashed it in, divided the spoils amongst the siblings and upgraded their own home either by moving or extensions etc. In which case the amount inherited in the SE would far outstrip inheritance in the north so its not unfair at all.

Agree. Perhaps there should be an exemption for those who want to turn their family homes into museums, and the tax should only be payable if and when they sell.

The thread title would only be misleading if married people couldn't benefit from a £1 million threshold.

As much as there are many single people, marriage hasn't died out yet.

Why should someone in London have to sell their deceased parents family home to pay iht, whereas not in the north?

Carrier Pigeon my heart bleeds, but I am struggling to imagine why you are still living with your parents as a late middle aged adult. Shurely time to move on and make your own way in the world, as a striver etc.

Another solution would be some rather more drastic measures to bring down London property prices - thus removing the problem. I'm a big fan of rent control myself. Last time it was tried in the UK, house prices came tumbling down, and housebuilding and home ownership spread across the UK, ironically creating the bedrock of home-owning conservativism we have all come to love.

Of course this is now extremely difficult in the UK because 40 years on from the sale of council housing, we now have an economy in which peoples' sense of success and prosperity is indissoluably linked to the perceived value of their home - well done Margaret.

This fine tradition has been carried on, as I mentioned higher up this thread, across all political parties, with 40% of all MPs now Buy to Let landlords. So if you stop and think about it for a moment beyond, say, your own front door, we are all in a bit of a pickle, basically - although you and your immediate family will be ok - at least for now - obviously - so that's all right.

I'm guessing you have never lived in a gated community, with its own private police force. I have. I hope your children and grand children enjoy it.

Isn't the whole discussion pretty moot given that most people avoid paying most if not all of any inheritance tax owed?

If you google 'inheritance tax avoidance', the first hit is an idiots guide to avoiding IT from the legitimate and pretty well respected 'Money Saving Expert' site, but there are numerous other sites as well (Money Advice Service, Which etc).

Wouldn't it be better for the threshold to be much higher, but there to be less scope for avoidance?

(Oh dear I am going down the 'people richer than me' route here aren't I? )

£1 million does not buy a mansion in most places now, you're not talking about multi-millionaires, just normal working people.
Anyway, IHT should be completely abolished, we've been taxed on it once, why should our family have to pay more when we die!

Aldi - you are FIRMLY on that route since you want to take money from higher earners to fund your IHT break.

£1 million does not buy a mansion in most places now, you're not talking about multi-millionaires, just normal working people.

Utter tosh.

IHT should be completely abolished, we've been taxed on it once, why should our family have to pay more when we die!

And that.

1 million does not buy a mansion in most places now, you're not talking about multi-millionaires, just normal working people.

A million pounds, or even the current IHT threshold for a single person of 325k is more wealth than most people will amass in a lifetime.

The fact that some people choose or 'have' to spend it on a a small house or flat in or near an extremely overpriced and crowded city does not change that. It is life changing lottery winning terrortery to most people.

It would appear that some posters are unable to imagine a world outside London on this issue. 1 million will buy a mansion in much of the country.

I live in the constituency with one of the highest concentrations of £1m houses in the country (not a stealth boast - mine isn't one of them). So I feel qualified to tell you that ordinary working people do NOT live in houses of this type. And you're not being taxed twice. You may have paid tax on the income that paid the mortgage on the original price, but you've paid nothing on the capital gain.

The argument that the money has been taxed once doesn't stand up. All income has been taxed once and is then used to buy thing which have tax applied and if it makes more money in the bank from interest or through investments then that growth is taxed too. Suggesting that just because it forms a windfall from parents, that its unfair to tax it when it passes to another person is not logical at all.

Also, by reducing iht you won't make £1 million houses more affordable, you'll just turn them into £1.2 million houses.

Apart from anything else - what makes the tories think that this will get their election campaign going? Surely anyone who benefits from this us already voting Tory. What is their message for those who are struggling to afford something in the private rented sector on a minimum wage?

I don't think anyone should inherit £1m tax free - it's a way to preserve inequality.

And why should my father, who walked out on us to remarry, be able to leave £1m tax free (he wouldn't be leaving it to us btw) when my mother, who never left and never remarried and stayed to bring up her children, would not?

I hate the whole thing.

Someone with a massive house in the north and £200k in the bank will be a lot richer than someone with a house like that and no other assets, but one will be classed as rich and have a huge tax bill and the other won't.

Why? Money in the bank is as taxable as the money tied up in a house.

Apart from anything else - what makes the tories think that this will get their election campaign going? Surely anyone who benefits from this us already voting Tory. What is their message for those who are struggling to afford something in the private rented sector on a minimum wage?

Good point - maybe to attract the UKIPers