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?

I'm talking to the op so why are others answering like I am addressing them?

FWIW, I agree with you OP.

However, I have seen my personal 'red flag' comment on this thread (but I worked hard to have a £1m house etc. etc.), so shall retreat to a safe distance .

This government just loves to keep house prices high too

because wealthy and influential people have a vested interest in high property prices ?

I'm confused about the handwringing then.

If you DC are going to inherit most of your estate, and worthy causes are only getting "a bit", that doesn't seem to tally with your dismay.

Surely you should be giving most of it to poorer people and telling your DC that they should earn their own money.

In fairness, I do see the point you are trying to make re inequity across society, I am in a similar situation re increased property value. But it hasn't crossed my mind to feel guilty about investment choices I have made (nor renovating 2 houses pretty much single handed) which have increased the value of my asset.

OP why don't you address your concern to your children?
Again nobody can answer what exactly YOU achieve from your children being taxed, funny that.
Completely brainwashed zombies of society.
I'm so glad when my beautiful amazing mother passed she wasn't so selfish and resentful. These thoughts wouldn't of even crossed her mind.
I didn't even get half what your children 'think' they will get.

Have a nice day x

Well indeed, Santas.

A PP said "I'm guessing 95% of people but their house with a mortgage". Yeah, except those who buy with a £1 million tax-free inheritance from their grandparents.

Two students graduate together, go on to the same job.

One gets a free house from grandparents' will. One pays rent, then later house price plus mortgage interest.

They have parallel careers all their lives. The first one invests their spare money in more property, shares, whatever. The second has no spare money because so much of their wage goes on accommodation costs. They suffer whenever the boiler breaks and certainly can't build up long savings.

On the day they both retire, the first turns to the second at the next desk next and says, "I deserve all this because I've worked hard all my life!"

Personally I'm not in favour of 100% inheritance tax. But I do wonder why politicians who drivel on about "fairness" and "rewarding hard work" aren't.

Answer: because they wouldn't want fairness if it bit them on the bum, but it's a good line to feed their voters.

We will be making every effort possible to ensure our DSs and DGCs get every penny of our money regardless of other people's opinion. We were not well off when the DSs were young, they went without quite a lot, and the more we can make it up to them before or after we die the better.

"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."

Exactly this, Philoslothy. I was then when I heard the news. If we're so broke that we need to cut services and benefits, how can we afford this?!

You have a choice to give away the £1m away to charity OP if you want.

YANBU. I think inheritances should be taxed at the beneficiary's marginal tax rate.

I think, like my the baby boomers generation, people also over estimate the influence they will has on their children's lives. You don't want them to pay IHT so they can purchase their own home in a market of sky high prices beyond the reach of those who can't exploit their parent gains?

People live longer now. You live until 85, 95 and even if your house money isn't spent on care your children will be what, 60, 70? They'll hardly be waiting for you to die to buy their first home, lol. They'll probably be grandparents themselves

Jazzy why would anyone care about "future society" when they are dead?

Gosh, what a thoroughly depressing world view. Fortunately, quite a few people seem to care about the sort of society future generations will have to work within, and making it a decent one, or they'd be fucked.

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

Well, not really. These are the public policy choices. The money can either go solely to THE CHILDREN OF THE DEAD (can I insist my boys are referred to as that in my will? It's beautufully dramatic) or shared between THE CHILDREN OF THE [RICH] DEAD and the children of those who weren't quite as lucky or privileged.

How does capital gains work in conjunction with iht?

If I inherited a house, I would have to sell it to pay the iht. Since I have my own home, I'd then get hit with capital gains wouldn't I? Would that be from the day I owned the property or from the day the deceased did?

I don't agree with iht personally, but I've not considered it from an equity PoV. My parents have built what they have, it's not unearned, untaxed income. They also don't agree with iht, mainly because they have worked and are still working so hard for what they have.

Are iht rules the same when a business is being passed on?

You don't get hit with CGT just the IHT.

If it weren't for IHT all you normal people wouldn't have a house to pass down. We'd still be renting off The Lord of the manor watching our homes being passed from
Toff to Toff

If you didn't sell the house to pay the CGT and kept it as an investment, you would pay CGT on any gain you make if you were to sell it in the future. The gain would only be the increase in value from what it was when you inherited it.

Are iht rules the same when a business is being passed on?

There is business property relief of 100% on most business types.

So are you going to ensure that the correct amount of money (ie. The equivalent IHT that would have been paid if the govt hadn't changed the threshold) is paid to the state on your death?

Or are you saying that you are only willing to help the poor and needy if you are forced to do so by the government?

That is the amount that my mortgage is for (£100k), and I pay that out of income after tax, so I get that 100k has already been taxed.

I know this isn't the point but anyone who thinks they've only paid £100k back on a £100k mortgage is a bit deluded!

You pay roughly double the capital amount over 25 years (more than double if paid over 25 years). So your house has to more than double in value before you make any real profit.

I agree OP. You have worked hard, paid tax etc but your kids haven't. They should pay tax on income.

I'd like to understand why this is happening and money being cut from benefits instead.

I will benefit from this in due course but I would SO much rather the money was put towards improving life for poorer and disabled people rather than middle class people like me who are doing fine already.

Why not give it all away to the poor and disabled when you inherit it?

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.

Not true. If we go back 25 yrs (the length of the typical mortgage) to 1990,
IHT kicked in at £128K, with no facility to carry over your spouses allowance, which effectively doubles the threshold.

It is currently £325K, after various increases, or £650K for a surviving spouse, soon to be upped to £500K / £1m.

£128K to £1m in what will be 27 years isn't bad going.

I find it odd that people don't care what happens to anyone else after they are dead.
Its all becoming a bit of a lottery whether or not you will actually leave any money because of the cost of care. If you die suddenly your family will inherit-if you need care for years they will not.
Perhaps inheritance tax and other taxes could help pay for fairer ways of funding long term nursing care for those who need it. Currently those who develop long term disabling conditions after age 65 are financially penalised.

Could not agree with you more OP. I will certainly benefit from this when our parents eventually pass on but I still think it's a disgrace. We can't afford to help the vulnerable how on earth is this a priority?