To have no issue at all with Inheritance tax?

[RiskManagement]

I really don't understand the objections or the frenzy to find way to avoid manage it.

My parents are professional people, been frugal all their lives. I have no idea what their financial situation is but I know there are some investments and they own their home in the SE, so should the worst happen, there will be a substantial sum, which AFAIK will go to DSis and I.

My main hope is that they live such long and active lives that it's all spent by the time they go. If they should need it I hope they can pay for good quality care. However, if there is anything left we will get £325k between us tax free. If there's more than that, why on earth shouldn't tax be paid on it?

On the basis that tax has to be raised somewhere, this seems like a relatively painless way to raise it to me. I'm not expecting anything, I haven't earned anything, if I get something, I won't object to paying tax on it.

It's totally contradictory to claim you want to encourage people to work hard while reducing taxes on unearned wealth.

An inheritance is money you didn't earn.

It comes to you purely because you are lucky.

A government that was genuinely interested in helping the hardworking would be reducing income taxes and increasing taxes on all unearned wealth.

But of course, it's all hypocrisy.

They don't give a shit about hard work unless it's a way to keep poor people occupied while wealthy people protect all the money they got for doing nothing.

In fact, any sort of windfall would be taxed. Any gifts over a certain amount with the exception of those being used for house deposits or business startups would be taxed.

I think I would rather the state stayed out of dictating to that sort extent what people do with their own money, thanks.

Wanting to leave what you've worked for to your dc is normal no? Why is it viewed as selfish? Or 'grabby'?

Well, yes. But equally, I'd like to keep all of the money I earn. But I accept that we need to pay some taxes. The argument 'I don't want to pay it' is a non-argument when used to distinguish between the fairness of different taxes.

I agree with the poster up thread who predicted 300 posts of arguing, with no minds changed!

The "state" wouldn't be "dictating" anything.

You would still be perfectly free to make large gifts.

But people who receive money are routinely taxes on it. Being taxed on a gift is fairer than being taxed on money you worked for.

Unless you want to abolish the state entirely, and taxes with it, all this crap about the state "interfering" is just obvious distraction.

What could be more of an interference that forcing my employer to give them a cut of my wages before I even receive them?

The reality is, now house prices are sky high, most people can work as hard as they like, without any chance of buying a house that pushes them over the threshold. So the idea that IHT "discourages hard work" is a real red herring. I understand the natural feeling of wanting assets to be passed on to children, but I think this is overidden by the fact that many children will not recieve an inheritance, through no fault of their own (or their parents).

I think the idea that all you have to do is work hard and you'll achieve the dream of assets, home ownership etc. is not true. It hasn't been true in the past and it certainly isn't true now. Of my generation of people in their 20s and 30s, we all work hard and the only ones who can afford houses are those with rich parents, or an inheritance. Inheritance tax, despite it's flaws, is one of the best ways to just level the playing field a tiny bit, to stop the gap between rich families and poor families getting wider and wider.

I want the state to "interfere"! I want high quality education for my children and excellent health care. We don't have those things now and we're certainly not going to have them in 5 years. A bit more tax would help.

If I died now the house might have to be sold to pay inheritance tax and my 3 very young kids uprooted when they had just lost their parent. I would like them to stay in their own home and any additional money from life insurance to be used to pay for help to try to maintain an OK lifestyle and pay for help to support elderly grandparents to care for them rather than having to go into foster care because the grandparents couldn't cope. I think it so sad that they could lose their home when I have worked so hard to try to give them a secure future even if I were not here. At least they should be able to keep the house until the last child reaches age 18 as often seems to happens with divorce.

OP, I'm with you.

How much is your house worth imigrantoo? Are you married to their father?

Even the people who pretend they don't want the state to interfere want the state to interfere.

They certainly expect the state to protect their private property.

And they want to poor to pay for that out of their earnings.

I am fairly right wing but I sort of agree with you OP. Of all the way to raise tax from individuals, this one seems the least objectionable!

At least they should be able to keep the house until the last child reaches age 18 as often seems to happens with divorce

They can in this circumstance.

So what if a person has been taxed on it already?

That's like saying you shouldn't be charged VAT on your can of Coke because the money you've used to buy it has been taxed.

Inheritance should be hit hard because it would encourage the current generation of older people to spend their saved money, stimulating the economy.

Our estate will be liable to inheritance tax. Despite our humble beginnings we have been higher rate tax payers for most of our working lives, we have never evaded any tax at all and worked bloody hard for our money. We have already paid a shed load of tax and I don't won't to pay it again.

So for every £100,000 over the threshold we have paid £45,000 income tax and of the £55,000 left we will have to pay another £22,000 Leaving just £33,000. It's a lot of tax.

Trust me, if you have earned the money yourself then you wouldn't be so chirpy about inheritance tax. It's our money and we earned every penny ourselves.

Hopefully it will be years before we die and we will have spent a lot of our money and will have given enough away to our children so there won't be too much left for the tax man.

riskmanagement - in SE over £1m. single parent

Parietal - I like the idea of taxing the person who gets the money, not the person who's died. That does seem much more fair, and would encourage people to share out their wealth in their wills.

Taxing large gifts is harder.

As PP said imigrantoo, they would be able to stay until 18

Trust me, if you have earned the money yourself then you wouldn't be so chirpy about inheritance tax. It's our money and we earned every penny ourselves

I HAVE earnt my money myself. This is precisely why I think that of taxes need to be raised then IT is fairer.

Binkybix - I didn't realize this. Can the guardians spend any other money/sell other properties during this time to reduce the IHT bill once the last child is 18?

the MAIN issue that i see is that those people with LOTS of money pay fuck all on the inheritance tax as they put in to trustfunds etc -

it should all be taxed, and not there to make the rich richer and the poor poorer

4got10 you have earned that money and you can spend it in your lifetime. Your children have not earned it. Despite this, they will still get a substantial portion of it. Plenty of people work themselves into the ground with nothing to show for it, because our system still doesn't redistribute enough wealth.

So for every £100,000 over the threshold we have paid £45,000 income tax and of the £55,000 left we will have to pay another £22,000 Leaving just £33,000.

Maths fail! On every £100K over the threshold you have paid £81,818.18 in tax. Because £181,818.18 less 45% tax leaves you with the £100K you now wish to pass on.

But even that assumes you pay 45% tax on everything, which you don't. You only pay that on earnings over £150K, below that it's graduated down to 40%, 20% and zero.

Plus one assumes a lot of your inheritance that takes up the initial £650K tax free is made up of house price inflation, which is tax free.

So sorry, but your sums are complete nonsense.

YANBU. I don't get it either. Inheritance has to be the biggest, most random inequality out there. Which is not a problem, but as an individual you are taxed on your labour so much in income tax. Its such a disincentive to work harder/longer hours/take on more responsibility, when you will only get half (after NI) of any increase. Yet, be born into the right family, or have parents that die early (mine did, but didn't leave me anything, so excuse my lack of sensitivity here) and for many, all those normal responsibilities, like working to pay a mortgage are taken away.

Low inheritance tax contributes to lack of ambition and motivation, (if you know you're going to inherit well, whats the point?) and increases inequality. And one of the worst things it does it contribute to rising house prices. When I worked in conveyancing, it was shocking how often a large deposit would come from an inheritance or indeed parental gift. And once a person has got that boost of a hundred thousand or so, that's them on the ladder, ever upwards, always ahead.

I'd far rather see IHT raised, and income tax reduced. Reward people for working, not for birthright. I'm quite right wing, but I've noticed that its nearly always left wingers or would-be socialists who are most in favour of the low IHT we currently have.

Amazingwhale - the problem is when people do just that, because they don't think they'll need to be in a care home for 10-15 years. So rather than saving for old age /to pass something on to the next generation, they spend now, or make big gifts to children/grandchildren to reduce their estates, and the tax payer ends up footing the care home bill.

TTWK lol, break it to me gently

Ok, so for every £100k of 'salary' (over the threashold levels - all very hypothetical) we will pay £45,000 tax. So we end up with £55k. 40% of £55k is £22. So doesn't that mean we are 'only' left with £33k out our original £100k of salary

I understand that's only on the income 'over' £150k!

Happy to be corrected .

Ps don't get me started on tax and pensions.