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.

Bluegrass That's only true if you decide that people need to be split up into little economic units of 1, and treated accordingly. If however you take the view that society is built on families because families are able, amongst themselves, to give each other support and stability and can even out the good times and bad, then you treat families as the economic (and social) units instead.

That's very unfair, and judgemental on people who don't have families. Its basically writing them off, treating them as inferior because they weren't lucky enough to be born into a large and financially stable family unit, or with the ability or luck to create one.

I note that most of the socialist Scandinavian countries have set up their societies to encourage women to return to work after having children, and that they have much higher levels of divorce, unmarried parents and single parent families.

RiskManagement Inheriting in your 50s isn't going to change the kind of house you can afford while you're raising a family, tax or no tax.

So whats the harm in taxing it higher then, so as to create a more level playing field?

In actual fact, parents avoiding IHT via the 7 year rule for gifts hugely contribute to rising house prices, by giving their offspring substantial deposits.

It might also discourage children of wealthy parents hanging around the family nest, not fulfilling their own potential, so as to better place themselves for an inheritance (of course that doesn't happen).

I'm kind of with you OP, because I believe an inheritance tax is a good thing for the overall running of society. People should be taxed if they get an unfair advantage because of who they were born to, but that is why our current so called 'inheritance tax' should be changed.

It needs to be a fair tax on the amount that individuals actually inherit, rather than a tax on people who died. I know dead people don't need their money or their houses, but as a person who is living and breathing now, I want the right to decide what happens to my property.

Take a fair share of what each beneficiary receives in inheritance, and then call it an inheritance tax.

I think the residential property should be left out of all calculations, but that everything else should be taxed.

So for example if an estate had a house worth £400k, cash/shares etc of £225k. And therefore no liable for IHT, I think the £225k should be taxed. The same if the house is worth £800k and there was £225k, only the £225k would be taxed.

If they owned multiple properties it would be main residential that was exempt.

Same for nursing care in old age, main residential home untouched but all assets to be spent not this £22k (or whatever it is) amount that it can fall to.

"That's very unfair, and judgemental on people who don't have families. Its basically writing them off, treating them as inferior because they weren't lucky enough to be born into a large and financially stable family unit, or with the ability or luck to create one."

I think that encapsulates a lot of what so many people find off putting about a left wing approach. Accepting that people, either as individuals or as families, should generally be left to benefit either from their own hard work, their good fortune or (more likely) a combination of both shouldn't immediately make you think that this is "treating other people as inferior" or "is writing them off". Otherwise it becomes little more than a politics of envy, "you have good fortune, (or you've worked hard to build something) - I don't, (or I haven't) so I should be able to take from you to even up the score".

We all accept it, to a point. We know that almost a third of our year will be spent working for purely for the state, with just the other two thirds coming to us. So for many it grates when the state comes knocking again and says that that wasn't enough, it wants a second chance to take some more.

And when you feel that a good chunk of that will just disappear into the vast bureaucracy of said state you tend to think that perhaps you should be trusted to decide how best that money is applied, not them. They had their (large) bite first time round, it's your turn now!

My best friend was orphaned aged 24 and her parents owned a home that had dramatically increased in value since purchase in the 70s not just due to inflation but also due to it being located in a newly desirable area. She lived in it her whole life and parents had paid off mortgage. No high wage or any other assets. Due to the inheritance tax rules, when she was orphaned she was presented with a large tax bill. Not only was she left with no family at a very young age, she was made homeless and bankrupt because of the bill.
Nobody should have to start their life on those terms.

Not read all the replies so prepared to get flamed but all the money you have managed to save all your life has already been taxed on income and savings and stamo duty etc, so I don't see a reason to have it taxed again to have it transferred to someone else's account on your death.

No problem with IT as a concept (although my parents are avoiding it by giving their estate away but that's their business) but what happens if the child living there is under 18? If anything happens to my husband and I after our child is born, would my child still be able to live in our home? Our house is well over the threshold already and even if the threshold increases. Does anyone know how this works? Sorry if already answered!

I don't have a problem with it either.

Bluegrass I think that encapsulates a lot of what so many people find off putting about a left wing approach.

First time I've ever been described as left wing Bluegrass!

Hmmm I don't expect to be left anything by way of inheritance as I hope my mum spends whatever she wants to for as long as she can.

However I fundamentally disagree with inheritance tax....I don't see what it has to do with wealth distribution wtc...I'm fairly left wing but sometimes things get a bit out of hand. It's paying twice, It's ridiculous!

Most people aren't getting inheritance because they were born into luxury, most people inherit a modest amount because their parent planned a little and saved for their offspring to benefit from the little they put aside.

Exactly Crazy! And we can't have it all ways....we're in a capitalist society and flag wave when a member of the monarchy has a milestone of whatever kind. Why shouldn't 'normal' people pass on whatever they've saved up? they've already paid tax on it anyway

The Chandler, I'm the OP? I completely agree with you.

98, how could she be homeless and bankrupt? She must have inherited substantially if she had a large tax bill. very distressing to lose your parents so young, but there are provisions for people to stay in the house up to 10 years

I also agree with inheritance tax.

I don't know the laws and rules in depth, but I do however think there should be some exceptions made.

The only example I can think of is farms...where some estates are worth £££ and are being passed on to children as business/property combined.

I work in business banking and a few years ago can remember dealing with a man whose dad (farmer) had died...overall the house and land was worth about £1m, with the farmhouse being about £700k of that, and the poor bugger had to sell it because of the IT bill. So losing his home and business in one go.

Do you actually live in the real world? Where is this sylvan paradise with cheap housing and well paid jobs? I'd love to live there! Unfortunately most people's jobs dictate where they live, not the low cost of housing.

West sussex. We live in a 3bedroom house worth £230k and have an income of 80k.

IHT is a very recent issue for me as DM recently passed away and her estate is just over the £325k limit. I don't mind paying it but my siblings do spouting "she paid enough tax". The fact is that the bulk of the value is from the huge increases in property prices, a property that was bought with a deposit that was given to her by a bf. None of which has been taxed. DM worked in education but certainly not 'hard all her life', and even called her own salary "obscene" in describing how high it was, as she also regarded the level of her final salary pension. She also had tens of thousands of pounds in chemo and other interventions and treatments. Any IHT due is far less than what she received from the State in the last year of her life alone.

It should be regarded as an Inheritor's Tax, none of us beneficiaries earned it - but I do think it should be paid after the estate is liquidated but before any funds are distributed to the beneficiaries.

She also had tens of thousands of pounds in chemo and other interventions and treatments. Any IHT due is far less than what she received from the State in the last year of her life alone.

Sorry for your loss

And bless you for recognising what so many refuse to - that tax isn't money given to "the state" by otherwise independent people who receive no benefit from it.

Unless you live on an off shore island you own outright that is not part of any country and is not party to any international treaties, the tax you pay is of benefit to you.

The most distasteful thing about the vast majority of people who moan about paying taxes and think they have a right to massive windfalls they did nothing to earn, is that they have no problem at all taking full advantage of things paid for by "the state".

Taxes are public money. Shared money that is used to provide services for all of us.

Unless you are an extremely wealthy anarchist who uses personal private security at all times and has never availed of any public service, you don't get to talk about working for "the state" rather than yourself.

The state as currently set up provides a lot of advantages for the wealthy that they couldn't afford without forcing poorer people to pay taxes.