To think my children have no right to inherit £1m free of tax?

[Gasp0deTheW0nderD0g]

My husband and I had the good luck to get onto the property ladder in London in the 80s when people on ordinary incomes could quite easily buy a family home. By sheer chance our fairly ordinary family home is now worth an eye-watering amount of money. No way could we buy it ourselves now. Our children will definitely not be able to buy their own homes unless they get jobs on far, far above the average salary and/or we re-mortgage or act as guarantors.

The BBC says that George Osborne is about to announce that inheritance tax on family homes worth up to £1m is going to be abolished. Why? Well, obviously to win votes - but from a moral perspective, why should my children inherit £1m and pay no tax on it?

Jonty I mean (spellcheck)

IT IS STILL A TAX THAT ONLY STUPID PEOPLE PAY

Or people who have no problem with paying tax and can recognise their relative privilege. These are the people who say, ethically, I think it's reasonable to be taxed on this, because it's more beneficial to society than the alternative.

A lot of inherited wealth probably leaves the country in the form of overseas holidays or buying imported goods. That's not great for the UK economy either.

The proceeds of house sales being spent on consumer goods creates a false economy. That expenditure is still based on borrowing. The only difference is it's the bank lending to the homebuyer.

Howcanitbe, don't forget all the folks who got paid for building bits of the plane, the supply chain for the parts, etc etc. (although some of those will be offshore).

I totally agree with you on the house price stuff - which will also be affected by the changes to people being able to access pension capital - many will just pour that into property investments.

A lot of panicked vote buying went on before the election without much thought of the impact. Though I'm pretty sure the Tories didn't think they'd be in a position where they'd have to implement their full manifesto!

‘Inheritance tax is a double tax,’ the critics say. But it isn’t, for the simple reason that someone who is dead can’t pay taxes. The tax is paid by the recipient, and is a first-time tax from their point of view.

That's not the reality of it though, that only works if there is only one recipient. Most people have more than one child, and it's not unusual for people to want to include grandchildren in their legacy.

I agree with the point made about double taxation, but it is the dead person that is being taxed. Saying that a dead person can't be taxed seems like it would be true, but as the recipients aren't currently taxed on what they actually inherit, then who is it that's being taxed if not the dead person?

"...The rich are not all rich because they've worked hard and had rare, valuable skills."

Exactly, Gasp. I wonder if the government and it's supporters see the irony regarding inheritance tax and the phrase "people who have "worked hard to own their own homes" should be able to pass it on to their children". But those who have inherited homes have not "worked hard" to get them, they were purely lucky. Which means not every home owner has "worked hard" to acheive that status. I'm really sick of hearing politicians spout the phrase "hard working". It's become a trigger for my rage, because clearly people can "work hard" and still be fucking poor! Inequality in this country is dreadful (amongst the worst in the world!) and needs addressing too.

Incidentally, I was extremely lucky to have inherited my Mum's little home. She worked hard all her life but it was only when her parents died, and she inherited some money, that she could afford to buy her first home.

The problem with inheritance tax at the moment is that it is the dead person that is taxed, not the people who inherit.

The point I think you are making is that is, under the new rules, if the estate is £1M left to 1 person, they will get £1m tax free. But if the estate is £2M left to 20 people, each person will pay some tax on their £100K. Which is indeed unfair, but it's still doesn't mean the dead person is taxed. Dead people can't pay tax. The way the living people who inherit pay IHT is unfair under the current system.

IT IS STILL A TAX THAT ONLY STUPID PEOPLE PAY

Or people who have no problem with paying tax and can recognise their relative privilege.

Or people who didn't have a crystal ball to tell them that they were going to get ill or suffer some other misfortune and die within seven years of making their will.

My husband and I will leave a sizable estate due to good luck, we are happy to pay inheritance tax on that estate because we have already benefited from it for most of our lives. My children are already hugely advantaged because they have mostly been to very good schools, they have had opportunities to try whatever sport or activity they wished, they have travelled the world and have contacts to help them get a job. They don't also need a few hundred thousand when they are in their late fifties. We don't need the money because we will be dead and the state does need the money.

We will pay inheritance tax, not because we are stupid but because we are not greedy and I hope that my children will not feel the need to grab what they have not earned.

But to be honest my biggest problem with this policy is the "fuck you" message that it sends to the poor and sick once again. If you have not grown up cushioned by inheritance, if you are poor, if you can't find work or if you are sick you are in austerity. The rest of us are laughing all the way to the bank, stepping over the bodies on the way.

Houses cost far more than the purchase price. I'm guessing 95% of people but their house with a mortgage - this means you borrow money than pay the bank that back with additional interest - by the time you have paid your mortgage back over 25/30 yrs you are paying back double the amount you borrowed so in reality you have bought a depreciating asset if house prices don't rise.

Also the reality of this change will only really affect people in London - most other parts of the country have very few houses which top £1million.

I agree with the point made about double taxation, but it is the dead person that is being taxed. Saying that a dead person can't be taxed seems like it would be true, but as the recipients aren't currently taxed on what they actually inherit, then who is it that's being taxed if not the dead person?

As soon as they die the deceased ceased to own anything. The named beneficiaries are the ultimate owners. Ergo, they are the ones taxed. To use the example above of 20 £100k bequests, each will pay 1/20th of the total tax bill. The testator can also direct which beneficiaries are to bear the burden of the tax.

If you, that's the royal you, don't like this policy make a will and leave the money to whoever you want to. You don't NEED to give it to your children, it doesn't need to pass a down your family tree

I s'pose all the people moaning on here about it won't leave a will and give it all a way though... They will leave it to their lucky children and deny the state.

Good point Ptolemey's. Those stupid fucjers, failing to predict future misfortune.

(My Jake, healthy, active grandmother had every expectation and plan to have the same sort of innings as her own mother, who lived to 106. Unfortunately, pancreatic cancer got her and she was dead in six months, aged 72. She was very pissed off about being robbed of her expected innings.)

My Jake? My hale, healthy gran.

My estate will be taxed because it will be above £1 million. I would not leave that amount of money to my children.

I do understand all the points made against mine, and maybe I'm missing something important, but the named beneficiaries aren't paying tax on what they receive. If they were, then they would get their unearned windfall before the government takes it's cut. But that's not what happens, the government takes it's cut before the named beneficiaries see a penny.

I just think that is hugely unfair, as do many people I know, which is why so many people go to lengths to avoid being out in that position.

I appreciate that I can't actively pay tax once I'm dead, but while I'm alive I want the right to decide what happens to my own assests without knowing that as soon as I drop dead, everything becomes the governments and they will just give what's left to my own family.

As I said my main issue is the message that it sends to society about who we care about. Apparently we are so broke that we need to grab billions of pounds back from the most vulnerable in society but we have the money to fund this.

If you want your money to go to strangers you don't know then give your whole inheritance to the tax man and write a new will.
Yabu and sound jealous of your children which is completely sad

Peggy - what's the problem with criticising a public policy that people feel is bad policy? Why should they be told to just work around it, rather than saying 'this is a shit policy'?

There's also a logical flaw in your argument. If people object to this policy on the basis of relative unfairness/disproportionate benefit to the already privileged, suggesting that they exclude their own inheritors from the policy and entrench inherited privilege in even fewer hands is unlikely to have the desired effect.

Ptolemey's, it's taken from what they would otherwise have received, though, isn't it?

I tend to think it's a slightly semantic point and that administratively it's probably simpler and cheaper to treat an estate as a single entity and apply the tax once, rather than pursuing individual legatees.

YABU OP.

Death duties, as IHT was formerly known, were traditionally only paid by the landed gentry who had to sell paintings and land to cover them, or open their houses to the public.

Now, as a Londoner with a tiny one-bedroomed flat, I am potentially liable for some IHT. That is obviously ridiculous, so the thresholds need to be increased as they haven't been in ages.

BabyFeets, jealous of my children? I don't think you've RTFT.

For the umpteenth time, I don't want to leave my money to strangers. I want to leave most of my money, if I have any, to my children, but I can see no ethical justification whatsoever for being able to leave a huge sum to them entirely free of tax.

Philoslothy has it exactly - it sends a message to society about who we care about.