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.

Even if the aunt's estate is worth £1 million the balance after tax is £730,000. If they have no hope of being able to afford a £270,000 mortgage between 5 adults, the sensible solution might be to move to one of those luxury mansions in the north?

It's just a bribe. There are lots of people out there who are so wealthy and self important that politics doesn't normally really touch them. Here DC is saying, basically, get out there and vote Tory - forget that very important lunch, business trip, conference call, all round "can't really be bothered" stuff, and in return we, the torys, will give each of you each a present of £175k for your children when you die. What's not to like. I can see how in marginals with high value properties it could play well.

yes but all homes around them have gone up in value, they can only 'cash in' if they move away from friends and family. Of course that's perfectly possible but whole communities of people in areas where property values have shot up are being priced out. Families can't leave their homes to their children because of IHT, whatever is left after IHT often won't buy a home in the same area. That same home in a different part of the country can stay in the family.

The super rich know all the loopholes, they have farms because a farm is exempt from IHT, they buy businesses because they are exempt from IHT, they give their Old Master paintings to the nation in lieu of IHT (and then get permission to keep them in the family home!)

If I sold my home tomorrow, divided the money between my DC and moved to a convent renouncing all my worldly goods then they would pay no IHT (so long as I lived more than 7 yrs.) You can give away everything in your lifetime and there is no IHT... It really is a death tax. It is very ordinary people, whose family home takes them over the threshold, who don't know all the loopholes, who get caught by this tax.

Yes most people inherit after they have married and had kids. It is a cash windfall to most people.

In Norfolk ordinary family homes are being picked up for cash as holiday homes. It is very sad.

Out of £1m, only £270k would be paid in tax.

Or £140k in the common scenario where the threshold is £650k.

I am very disappointed with this policy announcement, even though, if implemented, it would benefit me personally (a lot). I was a bit tempted to vote Conservative but not now. It just shows completely wrong priorities, wrong values. When government spending is under so much pressure, it is not the time to be cutting inheritance tax. It seems to me to be a much fairer tax than many others, and generally hits the better off, the people who can afford to pay it.

Exactly, the wrong priorities but that is fairly typical of the Conservative party and a bit of a slap in the face for those who may be having their disability benefits cut and have none of these people objecting so strongly noticed the state of the public services currently?

Gently because it's relevant to the discussion. People are saying they feel hard done by the Tories because they aren't looking out for normal people.

I think it hasn't been thought through properly. It will drive house prices up even further and make the rich poor divide wider. I wouldn't be in favour of this. And what about people with savings or a payout from insurance policies. They will be liable so why shouldn't property not be.

Good for you majestic. Proof that not everyone votes out of self-interest alone!

But in terms of being priced out of the SE, there are more job opportunities. My in laws are from the SE and go on about SIL/BIL not being able to live anywhere else because BIL can only work in London. That's kind of the point, if it's so great up north move there. The issue is that to find property easy you need to be richer than those around you and there aren't the job opportunities. Hence property is 'cheap' not if you earn 18k.

I think the proposed 'family home allowance' to reduce iht only applies to dwellings inherited by children.

I think the extra £175k applies only to the family home, so the threshold for other assets syats at £325k

"I think the extra £175k applies only to the family home, so the threshold for other assets syats at £325k"

Which will encourage people to spend more on their homes so that more escapes inheritance tax...doing little to keep house prices down...and so keeping the whole vicious, circle going.

But it must play well with some people. Today's guardian poll has torys now in a 6 point lead. So many people are depressingly self interested and short sighted.

Really, figment? I hadn't seen that poll, but disappointing if that's the case. I'd be surprised if the inheritance tax has swung it though - I understand that only 6% of estates were liable for it this year anyway. But perhaps people don't look at the detail.

I was sure I heard the increase only applies to property. So it's right that people will be tempted to put all their money into property to avoid the tax if they can. Didn't know about farms being exempt.

TheBlackRider must admit I lol'd at the IFS statement, essentially saying that people who are inheriting >£1m are generally pretty rich already. Surely a contender for the 2015 'No Shit Sherlock' award?