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.

I suppose I like the idea of a small state - but it's just that, an idea. It's not a reality, and it is not likely to be a reality again if we want free healthcare and education for all and other benefits for those that need it. Whether we are run by conservatives or labour or a coalition, there is not a huge amount of difference :- we actually have a big state that needs lots of funding. What fairer way to reduce inequality in society than to take it after people die? Better than taking more of people's hard earned income.

May I say, Figment, how much I like your posts on this thread. Been following all day on and off, but not had time to post, but you're saying everything I'd like to say in any case!

I'm a SE property owner and am staggered at some of the attitudes on here, especially towards social housing tenants. I came to property-owning relatively late in life, but was lucky enough to get in on the end days of the 100% mortgage, have enjoyed low interest rates and seen the value of my property double in the ten years I've had it. I'm delighted that I'll have something to leave my DC and consider myself extremely fortunate to have benefited from buying 'at the right time'. I count my blessings that I'm not at the mercy of a buy-to-let landlord who could make me move on a whim.

IT is absolutely one of the fairer taxes.

Income tax is taken at source for most people. VAT is paid when you purchase goods or services. Inheritance tax often forces people to sell something that the family own and have been using and in many cases live in to be able to pay the tax bill. That is quite different to other taxes. Also here we are talking about people's homes, possessions with sentimental value, things that have been in the family for generations. These are the reasons why inheritance tax causes much heart ache and strong feeling. I happily pay high taxes as I am lucky and earn well, but I begrudge being taxed for a second time when I die.

My the way figment, I'm not sure if all of your itemised list were actually the result of conservative government action - can you confirm if that is what you meant?

• colossal tax transfers to employers who refuse to pay a living wage

that was Gordon Brown wasn't it? do you mean introducing tax credits?

• and the mother of state intervention - owning our banks

the bank bail out was under a labour government

• massive tax transfers to private landlords

which government policy do you attribute this one to?

Hmm...see I don't really see the distinction. It feels like clutching at straws to me. Most people inherit long after moving out of the vaunted 'family home'. I get the sentimental value thing to a degree (although again how many families have other sentimental things that are also valuable?) but I think I could get quite upset about all the things I could afford if I didn't have to pay lots of tax too!

I still don't think sentimental reasons are good enough to justify not taxing enormous, unearnt windfalls when tax needs to come from somewhere. Essentially you want people to pay tax on their earnings to subsidise people to inherit large amounts absolutely tax free.

"Inheritance tax often forces people to sell something that the family own and have been using and in many cases live in to be able to pay the tax bill"

No. IHT sometimes causes executors to sell something that the previous owner no longer has any use for.

but I begrudge being taxed for a second time when I die. But, you won't know about it.

If the govt did sentiment we wouldn't be living in the country we are People need to get over that aspect and cough up

How much money are we talking about?
A sum of £3.402billion was collected in IHT in 2013. This is dwarfed by the Government's three big earners - Income Tax (£157billion), National Insurance (£108billion) and VAT (£105 billion)

"Dear hmrc,

here we are at 31st jan again and I have to tell you that I have become quite attached to some of those dear little £20 notes, old queenie peering out at me from under her crown with that wry expression, Adam Smith under his mop of messy hair. Therefore, for sentimental reasons, you may find my self assessment payment a bit light this year.

Hope you understand,

Yours as ever,

Merry.

Many family homes are now worth enough to push an estate into tax-paying territory. The average home sold for £514,000 in London August, according to the Office for National Statistics, and £338,000 in the surrounding areas of the SE.

Well if you are happy to sub that £3 billion Rosa, cheers!

I have introduced some figures for debate. In the scheme of running a country £3 billion is not very much. I think the impact is disproportionate on those who pay it for little overall gain. As I have said I happily pay vast amounts of tax on my income from all sources. I disagree with being taxed twice. It is me who is being taxed as it's my estate that pays the tax not my heirs who pay. They however in all likelihood will be the ones administering to it all.

So you also disagree with all taxes apart from income tax? Since that's being taxed twice too?

It's £500k, not £1m unless you happen to be married. if I die tomorrow my children are homeless due to 40% IHT and this change doesn't help with that. It is a tiny improvement. IHT is a pernicious left wing tax we need to abolish entirely.

And I have paid IHT when my father died so know how painful it is. We are taxed at every turn but only those of us who are keeping this nation going by hard work. From those who give to the nation is more taken. Taxed to the hilt higher than ever. I can work anywhere with a computer so I am sure mumsnetters would be delighted if I went off somewhere that actually appreciates the taxes I generate rather than the UK where we are subject to tax at every turn with no thanks for those few of us who are net payers into the system.

Anyway IHT is a voluntary tax on the stupid. You just have to give it all away and live 7 years and you don't pay it which is what anyone sensible does,.

I wonder how much more would be generated if it was made harder to avoid. I love the fact that the people against it assume that they are the only higher rate taxpayers!

if I die tomorrow my children are homeless due to 40% IHT and this change doesn't help with that

I just don't think that's true - there are provisions in place to prevent this situation I'm pretty sure of it. Unless they're adult children then I'm sure you'd appreciate the same sort of hard work that you put in to make their way in the world (with a hefty start from their inheritance of course).

I think the tax has to be paid up front so you don't even get a chance to sell the property and you have to get a bridging loan but I could be wrong.

so I am sure mumsnetters would be delighted if I went off somewhere

Yep.

I think you have 6 months or in some cases can pay over a long time period in installments. I agree that people shouldn't have to get a bridging loan, but I guess it's all these avoiders who mean that rules need to be quite tight.

You can pay it in 10-year instalments.

Instalments over 10 years, I mean.

if I die tomorrow my children are homeless due to 40% IHT

Oh, do give over. That's so insulting to anyone who has ever been, is, or might become properly homeless.