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 feel the bedroom tax has a lot of problems, but the fundermental idea of people having a house the size they need is not unfair.

Well I agree with this - unfortunately the 'has a lot of problems' bit is so enormous that I never in reality get to the second half of the sentence - the simplest being that for decades in the past it would have been insane to build social housing deliberately in tiny little one bed/two bed units. The reality bit is the kick in the head, and these can-do strivers in the government don't seem to think about reality much.

Funny how in a time of austerity, the Tories can find money to benefit the well off, when they are decimating services that help disabled and chronically ill people. Strange priorities, if you actually cared about people.

Toby - Well at least you are honest. Personally I don't vote for self interest. I want a just society. I don't rent a house, but I think the bedroom tax is wrong.

Me too. I don't understand people who vote for self interest alone. Don't they care what happens to the rest of the country?

I am lucky enough to own my own home, so the bedroom tax will not apply to me, but I still think it's wrong. I don't rely on welfare benefits, so won't be affected if they're cut, but I'm still concerned about the potential impact.

MeandJulio. I agree that people should have the size of house they need but the system is shit as per usual. I know someone who is about to be affected by the policy and she wants to downsize. The HA has told her that she has to find somebody to exchange with, she is not allowed to bid on a property because she is not in need. Surely that doesn't make sense?

Don't childless German people pay about 40% income tax?

Yes, Germany has higher rates of tax for many people.

I live in the US and there is no such thing as inheritance tax. When I say to people that 40% of my parents' belongings will go to the government they look at me like I am crazy or lying. Then they think the govt must be stealing all this money from people, why don't we vote them out!

Then I tell them about the heady days of 90% IHT and income tax, and they are beyond confused.

IHT just isn't something that exists in some countries, or capital gains.

So I am in the bizarre position that should something happen to my parents (hopefully unlikely) that the UK govt would tax me 40%, then the US govt would refund it to meM

No I totally agree the humanjam. That's what I'm saying too. Looking purely at the basic principle of the bedroom tax, it is a genuine problem that in some cases social housing of the size built to house families is lived in by single people. For years councils have looked at ways to encourage particularly older people to downsize. But that was supposed to be done in a more sensitive way, with housing officers discussing it with tenants (no idea how it worked in practice). Banging a big across-the-country rent increase down without apparently even looking at whether there was housing stock available was a) cruel b) stupid and c) only going to lead to a big surge in homelessness.

Couldn't agree more, mariamin - tax is the price we all pay in order to live in a decent society, with free healthcare and education available for all.

The whole essence of living in a society involves the tax burden being progressive - with those who have more (either income or wealth) contributing more to support those who have less. Inheritance tax is a legitimate part of the tax system.

40% of your parents' belongings over £650,000 kickassangel, don't forget...

This will perpetuate the inequality of property prices as the children of those in the South East will be inheriting more so more able to buy down there while the young people from the North will be at even more of a disadvantage than they already are if they should need to move there

senren, I'm afraid that's just tough, because if your parents don't leave you a few hundred thousand, it's apparently because you don't deserve it.

If I inherited a £1000000 house, I could sell it, buy a nice house up north for 200k and then not bother working for the next 25 years or so while living quite comfortably.

Then I could start thinking about retirement.

Shame my family all live in none crazy house price territory.

As do most people. IHT as it stands even now only affects something like 6% of estates. Don't be fooled into thinking that these people have anything like approaching 'normal' levels of wealth.

I live in the US and there is no such thing as inheritance tax.

You do have real estate tax over there though. I'd vote for any party that wanted to bring that in here. That would soon see the housing crisis (and it is a crisis, not a 'boom') stopped dead in its tracks.

My children will hopefully benefit from a sizeable inheritance. However theu will not have earned their inheritance and will have been benfited from our good luck all their lives. I hope they willingly pay inheritance tax which can help those who have not been as lucky.

I think today's announcement is typical Tory looking after the rich nonsense. A £1 million house is a huge luxury for the few.

kickassangel - there most definitely is an inheritance tax in America, but it is called an 'Estate Tax'.

A certain amount is exempt from tax, but once over that threshold, taxes are due to both the federal and state government.

From the IRS website:
" The applicable exclusion amount is $1,500,000 (2004-2005), $2,000,000 (2006-2008), $3,500,000 (2009), $5,000,000 (2010-2011), $5,250,000 (2013), $5,340,000 (2014), and $5,430,000 (2015)."

The assumption that London houses were just gifted to Londoners who are now millionaires is wrong. Londoners who buy have nothing like the disposable income or the space of those who have bought houses elsewhere.

Really if I hadn't been born here and have friends and a job here I would not see the point in staying - although I love my city. I have never had a proper garden or a bedroom that I can fit a double bed in and still get into from both sides, or a living room that would fit more than a two-seater sofa and an armchair in it. And almost every penny I earnt went on the mortgage. And I am classed as rich and this unrealised "gain" is taxed, (either by a ridiculous mansion tax or IHT.)

I am not a Tory voter but this is a policy I support, (and as others have said Labour did it last time)

I think this policy just shows how uncaring the Tories are. It's a cynical vote grabber.

I think the threshold for Inheritance Tax should be lowered, not raised. When my parents die, assuming they leave their property to me, I will suddenly have about £400,000 that I haven't earned. Why shouldn't I pay tax on it? My parents never had a mortgage of more than £25,000, so they've not paid tax on the bulk of the value. The property has gained hugely in value through house price rises.

I would much rather that all estates were charged Inheritance Tax on their full value, and the money invested in the NHS, or in the welfare system.

We own a 4 bedroom house in zone 2 which we bought 18 months ago. It did not cost us £1 million. People who have £1 million houses, even in London, are well off regardless of their class origins.

I've also never understood the "taxed twice" argument. YOU are not being taxed twice. The testator was taxed on his/her income when it was earned. He/she may never have been taxed on e.g. inherited money used to buy a property. You (the beneficiary) are then taxed on the money -over a certain amount - which, unlike your earnings, comes to you merely by an accident of birth. The money may be subject to tax twice, yes, but so is the money you earn and then spend on goods and services, and VAT never causes anything like this fuss.

The Tories know cuts to IHT go down well - hence the election that never was when Gordon Brown was spooked by the announcement at conference. This is shameless populism - but I can't understand why it is so popular in the electorate at large because, however you cut the numbers, it entrenches wealth in the hands of the few.

I say all this as someone whose children would benefit from this change.

Mountain in London last year each house in London "earned" on average £40,000. Hmmm. With the average annual income, even in London, substantially lower than that, what is more "hardworking?" You or your house?

Sounds good to me - I'm sure he's just won the election with this one.
( Although UKIP would scrap inheritance tax altogether. )

Given that inheritance for a lot of people will be untaxed gains in the value of the family gone it can hardly be described as being taxed twice;

It's because they're losing in London. Simples.