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 was a floating voter until yesterday. I've read so much horseshite about what's fair and what's not and how paying two lots of tax is no different than other purchases, comparing house buying to food shopping
And the old chestnut about Nordic countries and how we should aspire to that model. "Let's tax everyone through the nose and invest millions in the public sector and provide free childcare for all"
Said no Labour Prime Minister. Ever.

(Especially given that the average age of a first time buyer is now 38) what is the moral difference between buying and renting a property?

If iht rates are out of kilter with house values then the answer is to take sensible measures to bring down those values.

Iht is one of the few progressive mechanisms for achieving this, especially as it doesn't impact so badly on those who have recently brought and are at risk of negative equity.

The uk's high reliance on property values to make consumers feel "wealthy" is probably the single most serious weakness in our economy and a key reason for our low productivity. When a very high proportion of someone's income goes on rent, they have little left to buy the stuff and services others produce duh.

But with 40% of our current MPs as buy-to-let landlords, this isn't going to change soon.

And judging by some of the voices on this thread perhaps they have their barometer set just about right. Scary stuff.

I don't think inheritance tax is unfair because of the 'taxed twice' argument. I don't think that has anything to do with it.

I think it's unfair because once we have bought and paid for something, it belongs to us, and we should be able to do whatever we want with it, including giving it to our children.

Inheritance tax would be fairer if it were paid by the beneficiaries of an estate. That way, it would be paying a fair tax on an unearned gain. But as it is now, tax is paid on the estate, the dead person is paying tax just for dying. They may want to leave their estate to be shared between four children or between more immediate family members, so no individual is going to inherit a huge amount even if the estate does have a million pound house in it, although it's way less than that at the moment. If each of those family members paid a capital gains tax on what they actually receive, then I don't think anyone would complain it's unfair. But the government shouldn't be taking it's cut before a deceased's family gets their share.

Hannah, better than Labour governments who hand out badly though out random lottery prizes with no ability to fund them and no thought for bankrupting the treasury whilst they're playing at Robin Hood.

Why is it that some rich people seem so incapable of grasping that luck has inevitably played a significant part in creating their wealth? All this banging on about how hard they have worked. Do they think that those with no inheritance to leave for their kids are all lazy feckless slackers?

I work hard. My parents have worked incredibly hard throughout their lives. We are all very comfortably off. My grandparents worked harder than any of us, and they left behind fuck all. Wealth is not always a good measure of how hard people have worked.

If your parents live in a council house, you are given one week where I live, to clear the house, so it can be rented out again. Now that is tough when you are grieving.

I don't get y ppl are comparing this to cuts - please enlighten me.

Those receiving benefits (whatever they ma be) are receiving money from tax payer. They are getting money so ofcourse if there are cuts, they will receive less.

IHT is talking about people keeping their own money/property to do as they wish with. This could be leaving it to charity or their children.

2 different things. I think IHT is wrong. People work to provide for their children and if they are lucky enough to get to that position - why penalise them because others couldn't ?

People seem to forget that the vast majority of people in life are neither rich nor poor , just doing our very best to get by.

Very true, but this does not apply to those who stand to gain from this change to inheritance tax. We are talking about people who stand to inherit hundreds of thousands of pounds. If you don't think that this makes them incredibly privileged, then I would suggest that your perspective is very warped.

No, we aren't talking about people who stand to inherit hundreds of thousands of pounds. We are talking about someone who has just lost their parents and wants to be able to continue living in their family home. The IHT threshold is very low at the moment, and an average family home miles away from London might need to be split between four siblings, none of whom are going to get anywhere near a hundred thousand pounds after tax has been paid and the rest has been divided.

Yes, they will get something, and for that they will be lucky (even considering their bereavement) but let's not pretend that they are the wealthy elite, they are not.

I think anyone who automatically assumes that a family hit by inheritance tax must be incredibly privileged has a wrapper and inaccurate perspective.

Kampeki it's because human beings have an in-built protective bias which tells them that success is attributable to themselves while failure is attributable to others/the environment. It is a variety of optimism and is supposed to protect us from mental pain. The exceptions are depressive realists who see the world as it is and correctly identify their contribution.

Ayn Rand would enjoy some of the posts on this thread.

But all taxes and penalising people really. If one's agrees that we need to collect tax then it needs to come from somewhere then why is IT less fair than others?

Kampeki - we know plenty of people who think we're, " lucky".

When we point out that we work over 120 hours a week between us, that DH travels for weeks at a time, that 3 am is considered a reasonable time to conferance call - and compare it to their 35.5 hours a week 2 miles down the road.......they realise just how " lucky" we are.

My cleaner works hard. Never known her to step off a 20 hour flight straight into a meeting or be talking to clients at 2 am.

Bereal, because tax cuts for the rich mean less money going into the Exchequer. Many of us feel that it is immoral for the rich to pay less at a time when we're being told that the country can't afford to help those who really need it.

this is what you can buy in the south Wales valleys for 0.5m
or this for less than 0.4m

In some of these areas there is NOTHING for sale over £500k.

There is a housing market outside of London, funnily enough. And people inheriting second homes in London, potentially paying no IHT if the Tories have their way, selling up and then using that income to buy a second home somewhere outside London, pushes prices up for everyone else.

Kampeki - do you have any understanding of just how much tax " the rich" already pay?

Over 100K you have no personal allowance and increased NI contributions. You will pay 405/45% on MOST of what you earn.

The way some people talk on here it's as if the well off are paying peanuts.

No, we aren't talking about people who stand to inherit hundreds of thousands of pounds. We are talking about someone who has just lost their parents and wants to be able to continue living in their family home

How many adults are really still living on the family home when their parents die?

At least the Labour party has a transparent budget for their policies.

They said this morning they will tax the well off even more. By how much, however, they are being coy.

Usual tax, spend on shite , borrow horror from them, then.

Fine, if there was an exemption that if you were still living in the family home you had lived in since a child, how many people would this really affect?

It makes no difference now much tax you as the owner of a £m house have paid. The beneficiaries (your children) haven't worked hard for it or paid tax on it. Why shouldn't a massive unearned (by the beneficiaries) windfall be taxed?

Enough that they don't deserve to be completely ignored by their own government Binky.

I know someone who was in that position, lost both her parents within two months of each other when she was only 21. No other family. They had a nice family home, but nothing amazing and they certainly weren't wealthy. This girl struggled to pay the inheritance tax bill for years simply because she couldn't bear to leave her home, understandably since it was all she had left. It meant she had to work instead of continuing to study, which she would have done if she hadn't lost her parents, and in the end she had to sell the home.

I can't see how anyone would think that's fair.

Why shouldn't a massive unearned (by the beneficiaries) windfall be taxed?

That's not what happens though. If the beneficiaries were taxed on what they received, it would be much fairer. But they aren't. The dead person is taxed on everything they own before they are allowed to pass anything to their children.

Ponio you are sort of proving my original point which is that the only people likely to find this persuasive are those who are already die hard conservatives, whereas the rental population - now in the majority for the first time in many years - are somewhat less likely to find it morally or economically acceptable.

Unless, of course, you were wavering towards ukip or perhaps might otherwise have been too busy or self important in your vital jobs to bother to vote.

In reality many (but not all) people earning a lot will be because of a combination of luck and hard work. But to not acknowledge the luck part of it is foolish.

PtolemysNeedle - At 21 she could have easily lived somewhere else. If she had been in a council house, she would have been subject to the bedroom tax, and couldn't have afforded to live there either.
A friends parents died at 16. The house was rented, so he moved out on the day of his parents death, and was never able to return. Should the state have paid for the rent of the house for him as it was all he had left?
Parents if they have money, should plan for their death.