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?

howcanitbe solicitors go to extreme lengths to find ways a house can be 'given away' or put into a trust in such a way that the original owners still live in it but it is not owned by them so not passed on in their will.

It shouldn't be possible but it is.

Newflipflops what is ridiculous is that a one bedroom flat costs that much. Passing in wealth will only serve to increase house prices.

You are.free to choose to do so.
Personally I don't want to. I don't lose sleep over the vast majority of "poor" people. I have lived in poor countries where people do struggle to get food and medicine.

I read your post and you sound jealous and resentful.

Why do you care about tax so much when you will be dead?

Add message | Report | Message poster BabyFeets Sat 04-Jul-15 10:05:21
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

How exactly am I jealous of my own children? My children have a far better life than I have ever had but that is something that brings me a sense of contentment and not jealousy. Surely most of us want to be able to give our own children better than we had. But there is only so much money a person needs. We have seven children in our will plus siblings so the money is going to be spread rather thinly but even then there is only so much they "need".

Society relies on us all giving money to strangers through taxation, do you object to income tax as well?

Add message | Report | Message poster BabyFeets Sat 04-Jul-15 10:15:40
Why do you care about tax so much when you will be dead?

I care because the government is claiming that the country is so broke that we need to seize billions of pounds back from the most vulnerable in society. Heck if the government had endless money I would not have an issue with this proposal but apparently we are living in dark times of austerity unless you have one million pounds to pass on to your children.

Many of the arguments around this seem to assume that if someone is going to inherit, then they must automatically be significantly advantaged compared to everyone else, bit that just isn't true from what I see around me.

My children will inherit, (assuming life goes to plan and I live till old age it will probably be enough to be a big help in paying off their mortgage) but I don't have so high an income that I can give my children every opportunity they could possibly want. I won't be able to pay their university tuition fees, or help them with a nice deposit for their first home, or do plenty of other things that the truly wealthy can do for their offspring. Poverty is not the only thing that can disadvantage a family, which is why I resent that I can't give my children what is mine when I die without having to actively tax avoid and hope I stay alive long enough for it to work. I resent that the government thinks it can take my property and have as much as it wants and my children only get what is left over. It's just not right.

Tax should be paid for all the good reasons we already pay tax, but not in the way it is at the moment.

Reducing IHT won't benefit my children if they are relying on inheritance to buy a house and I don't pop my clogs until they are in their fifties, sixties or seventies. Reasonable house prices will benefit them.

Reducing IHT will do nothing to stabilise house prices.

I think it's a silly policy because I am a selfish pragmatist, not because I'm a lefty do gooder.

Why do you care about tax so much when you will be dead?

I'm not dead now, and right now, while I'm living, I want the right to do what I want with my own assets without knowing that if I die too soon or if I don't employ people to tax avoid for me, the government is going to take what it wants before my own children see a penny.

Good point, merrymouse. I'm 54 now and my children are in their early 20s. I'm hoping for a bit longer yet before any of this becomes relevant!

Sadly Ptolomey the fact that you own your own home does make you hugely advantaged. It used to the the case that most of us could assume that they would own their own home, that is becoming a luxury for the privileged few.

I get the argument that no inheritance tax is rewarding those who already have money and widening the gap. I am on the fence about this too as dh and I are likely to have a very good inheritance tax in the future. Dh because he is an only child and both parents own their homes outright (assuming this money doesn't all go on their care)

I am on the fence as I know I am extremely lucky to have this having not done anything to earn it myself. I don't take this for granted and I get the argument that it's widening the gap and many people can't get on the property ladder and so the cycle is likely to continue as they have nothing or very little to pass onto their children and their grandchildren etc.

But at the same time I feel it depends how the wealth was gained in the first place. My father worked very, very hard for what he has and sacrificed family time, relationships and mental health to get it. Yes, I know others also sacrifice these things and don't get it.

He was extremely ambitious and worked hard. He started as a post boy in a large company and continued to rise and rise until eventually he was the to CEO of that company. An incredible achievement. My mum and him didn't always have money, they struggled but by the time I was born it was a different story. By that time he had money but the sacrifice was pretty much missing me growing up, large amounts of time away from us and as a result a strained relationship between df and myself. I personally don't put so much value on money and achievement that I would make these sacrifices.

However, as I ve got older the resentment I felt for my dad in my younger years have turned more to admiration. I know now, which perhaps I didn't understand before, that he did it all, yes for his own ambition and lifestyle he desired, but also to set his children and grand-children up so we can buy homes, study if we want to and have a good lifestyle. Why shouldn't he do this? Why should a large percentage of this money go to the government when my father worked so hard for it? Should we all be punished and penalised for his achievements? No in my opinion they should not.

Have you changed your name?

Surely as we all live longer and longer, more and more people will need to sell their family homes to fund care/nursing home places. That's what is happening with my gran right now, she is gutted that she won't be able to leave her house to her family but that's just the way it is.

I understand the indignance of posters who have pointed out the system favours those who have assets of less than £20,000 by the time they need to go into a home as they get their care funded straight of the bat. But there just isn't unlimited public money to go around to fund 100% of the increasing numbers of elderly people. I think it's right that those who can pay fpr themselves, do. And I say that as soneone who would only be in a position to buy a house myself if I inherited money.

Why do you care about tax so much when you will be dead?

Oh yes. God forbid anyone should be concerned about the future of our society and the people who live in it.

How does it make me advantaged in the here and now? In the life that my children and I are living at the moment?

It's an ex council house, there are people living in houses exactly the same as mine and having it paid for by housing benefit. They have the advantage of not having to worry about maintenance or repairs which are things I have to find the money for. I don't have a problem with that, but I think it's factually incorrect to say that right now, owning my home gives makes me advantaged. It doesn't, and if anything it's people who don't have to pay for the expensive upkeep of a house that are advantaged.

There might be an advantage when I die and my children can inherit, but as that's not likely to happen for another fifty or sixty years and even then the state will benefit as much as my children by taking their cut first, but for now, no. There is no advantage that I'm aware of.

No philoslothy, it isn't ridiculous, it's the market. London is now an asset class for global wealth and my tiny flat is supposedly worth £400k so Would be liable for tax on £75k for a property that non-Londoners, and people with the privileges you have said YOU have, would turn their noses up at.

I am a working class Londoner who had no birth advantages or inheritance so I don't feel compelled to give this money away, thanks very much. The thresholds are currently way too low and haven't been modified in ages.

The fact you are alive now means nothing since the inheritance isn't available until you are dead.
Why you brough up this point I do not know. You sound very confused.
You have nothing to achieve with your children paying tax. You will not get a free pass to heaven with your children being taxed.
Again you have NOTHING to achieve with your children being taxed when you are dead.
Think about these words carefully.

Sorry for the obvious mistake there, got distracted!

Jazzy why would anyone care about "future society" when they are dead? Will future society be paying for the funeral, the grave stone and putting flowers on the grave every year?
No?
Who will be doing it - THE CHILDREN OF THE DEAD.

Will "future society" be affected a stranger is dead?
No?
But who will?
THE CHILDREN OF THE DEAD

The fact you are alive now means nothing since the inheritance isn't available until you are dead.

It might not be available as inheritance until I'm dead, but it is available as my stuff, my property right now.

^Again you have NOTHING to achieve with your children being taxed when you are dead.
Think about these words carefully.^

I'm happy for my children to be taxed when I am dead. But tax each of them on what they actually recieve in the same way that they would pay for any other unearned capital gain. Do not tax them more, or as one unit, just because their unearned capital gain came from my death.

Only you know the reason why you don't your children to have some financial benefit when you die. I would have thought that in the trauma of losing parents not having to factor in a wedge of cash to the tax man was a good thing.

Probate is stressful.

Currently a single person's estate has to be worth over £325k for IHT to be payable. Then the estate pays out 40% of the value above that threshold.

So in NewFlipFlop's case, the IHT payable is £30k. Her heirs will get £370k from the sale of her flat. That's a lot of money.

I'm no raving leftie (more of a centre softy :) ) but I feel the point is often being missed by the 'paying tax twice' and 'it's my property the gvt can't take it' types.

The fact is, nobody pays IHT on their own home or wealth. They pay it when they receive a chunk of unearned money. It is paid by your estates beneficiaries, not by you.

The tax isn't paid twice. The homeowner only pays one lot of tax. After they die, the home then becomes an asset of value, unearned by your kids. I feel it is right that some tax is paid on this.

I may well be a IHT tax payer in the future, if my folks don't need residential care. I'll still be getting a chunk of money I didn't earn though. I don't see what I have to complain about.