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.

Nobody going to hazard an opinion on my ? above about how much would be considered a fair tax take?

Yes, its not all about house prices, everything is included in the estate. So my sister who lives up north and has a lovely country house and 2 high end cars plus a healthy bank account probably has the same total estate as me and dh in our cramped London house with one very unimpressive car and nothing in the bank!

This isn't a north/south issue at all. The value of an estate is a financial figure and inheritance is a % so you only pay more if you receive more.Its one of the fairest taxes imaginable with everything taken into account.

but one will be classed as rich and have a huge tax bill - No, they won't, because they'll be dead.

The person receiving completely unearned money will face the tax bill.

I think UKIPers - by and large - are less wealthy, on average, than the general population. And they're a threat to the Tories in constituencies where house prices are generally lower. So, if that's their calculation, then it's a bit of a poor one.

Equal - I don't think the DEAD issue is getting through!

Matey - I already did. To a certian extent (in response to another poster posing a slightly different question). But hey ho, here we go again - with the extra bells and whistles you added on - IHT - stay where it is (or idealy lower the threshold). IT - 50% on incomes above £150k and idealy 60% on incomes above £500k. Pension relief - reduce it at £150k as proposed, but spend wisely (I think the proposed reduction in student loans is supposed to be funded by this? Seems fair). NI - stay as it is. Mansion tax - as proposed by Labour. I'd also be in favour of a slower unwind of the nil band for IT, say unwind it between £100k and £130k rather than £100-£120 because that marginal rate of 67% does bite excessively hard and it's not even aimed at top earners which seems harsh. Alternatively keep the nil band for everyone but raise the levels of IT at say £120/£130 rather than £150. This would be more transparent.

No, it's not. It's bizarre, perhaps they all expect to spend their afterlife shaking their fists at the government spending their hard-earned cash.

mateysmum - no because it depends on so many different factors.

As a general rule, however, I prefer taxes on unearned wealth (such as inheritance or capital gains) to taxes on earnings or consumption. So that's why I don't support a lowering of the IHT threshold, even though I might, one day, stand to gain a great deal from it.

I think the Tories think that deep down everyone is driven by greed and this will buy them some floating votes. May well be a miscalculation as it just doesn't sit at all well next to their insistence on cuts in public services and care provisions all over the country.

Nobody going to hazard an opinion on my ? above about how much would be considered a fair tax take?

To be honest, I'm not sure but that doesn't invalidate my thoughts about IT.

Kippers can be quite wealthy outside the urban connurbations. The landed community round where I live is very purple. Sadly. Of course, many of them get APR or BPR but they don't necessarily know that. The sheer ignorance about tax matters that is on display not just on this thread but in general society is sometimes quite breathtaking (given that people get so exercised about it. There are loads of things I don't know about but I don't weigh into arguments about them with my faulty/non existent 'knowledge'. This doesn't seem to stop people when the topic is tax, though).

Plus what treats said on this issue.

nobodyknows (you'll cry if you want to!) - I think this thread proves that plenty of people are, in fact, driven by greed. :(

I agree Gently but hopefully most of those were already voting Tory so not much to gain. Perhaps some of the floating types like myself have a bit more cause to think about what it means. Ever the optimist!

Gently, what sort of tax ignorance are you seeing on this thread?

I agree regarding people being driven by greed. It's a depressing state of affairs

I think they're responding to their right wing party members and think tanks telling them that this sort of thing is a vote winner - that it's an expression of 'true Conservative values' about hard work and aspiration and family and blah.

I'm confident that the opinion polls won't move a millimetre as a result of this announcement. Tax cuts for rich people hasn't exactly motivated millions of undecideds to vote Tory so far, has it.

I too typed a reply to you, mateysmum. But didn't post as it basically comes down to "it depends".

We aren't being taxed in order to punish us for wealth, but to pay for society coping with other dire unfairnesses - what's fair about becoming ill? Being mugged?

It's a balance of what sort of society we want to live in (private thief takers and dungeons, anyone?) vs how to make that happen. What's the most cost-effective way to achieve it? Fairest way? Are those even the same?

So "fairness" to you in your role as taxpayer doesn't exist in isolation from "fairness" to you in all other aspects of citizenship.

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

This is a good point but the tories were certainly badging this as being about "the family home" and intimating that it would only apply to the real estate not other assets. And if the family home was worth above £2m the benefit would taper away. I'm not sure how you could treat different bits of the estate differently but the way it was presented, it would certainly be a giveaway to the South East, whereas the Mansion Tax is a tax on the South East (because the £2m barrier for that is not regional as it really should be given the massive disparity in house prices which are not wholly matched by disparities in income).

The problem with inheritance tax, as indeed with most taxes you can care to name, is that the rich do not pay it.

In fact, it would be fair to say that one of the reasons why the rich are rich is because they find ways to pay as little tax as possible.

Most very wealthy people do not actually own the properties they live in; an entity will own it instead -- and all manner of structures will be in place to ensure the tax liability is as small as possible for almost every eventuality.

For example, and this truly takes the biscuit, all those super-rich folk who are excavating two or three floors down from a London town house basement? While that work is taking place, they are not even liable for bloody council tax.

The only people who pay IHT in reality are people that have been caught out by it: either because they did not prepare, did not realise their estate would fall into IHT, or had some sort of issues with their heirs.

PausingFlatly - I agree with all of that. Excellent summary of the principles of why we should pay tax, if I may say so......

I wish Labour and the LibDems were capable of being as eloquent as you. There's such a great case to be made for why fair taxation and redistribution is in everyone's interests, but they keep allowing the Tories to manipulate them into talking about deficit reduction.

Is there a time limit for paying inheritance tax? What if the beneficiary choose not to sell the property could they avoid paying it that way? It's not something that I will ever have to be concerned with, I'm just interested.