Raising IHT threshold to £1,000,000 - because you're worth it...

[Figmentofmyimagination]

There are so many reasons why this change is morally repugnant, socially regressive and economically illiterate, it is hard to know where to begin with this ....

I support 100% inheritance tax. So, well, thats all i have to say really.

People who don't like paying IHT also don't seem to like the concept of care home fees.

I think it's great. My gran has two houses and when they are handed down to us together with her cash we will lose a lot of it to IHT as it standa.

Her husband worked incredibly hard all his life and spent his money wisely: why shouldn't it be left to his family? Why should the government benefit again, he paid his taxes through work and when he bought and sold property.

The idea that this initiative has any place in a self - proclaimed budget for working people is laughable. Even those passing on the wealth have not "earned" the bulk of it in the majority of cases, where it comes from crazy house price rises. For those actually benefiting from the threshold rise, it is the very definition of unearned income and entrenches wealth in the hands of those who already have it. At the same time, Osborne is cutting child tax credits which actually do benefit working parents. We're all in this together, you know. Unless we have a house worth between £650k and £1 million.

And for those who believe all opposition to this policy stems from envy, I (or rather my kids) stand to benefit from it.

YANBU. This is a terrible blow for social mobility.

Disappointing to read economically illiterate replies to the OP about why the announcement isn't economically illiterate.

When did our nation turn so scared, and so hateful, that we all became so utterly myopic and grabbing merely looking out for ourselves?

I'm with the OP on this one. I used to think that IHT should be 100% so that within a generation everyone would be equal. I've mellowed a bit and would now allow people to leave sufficient to cover average house deposit to each of their children - it could vary regionally - and take the rest as tax.

Her husband worked incredibly hard all his life and spent his money wisely: why shouldn't it be left to his family? Why should the government benefit again, he paid his taxes through work and when he bought and sold property.

What tax did he pay when he sold property? Explain that to me?
I've bought and sold houses. I pay stamp duty when I buy but I can't recall paying any tax when I sold. I've made hundreds of thousands in London due to house price inflation and I haven't paid tax on any of it.

Perhaps we should lower the threshold to £10k instead?

If it's morally repugnant to pass your 3-bed semi down to your kids if you live in Sussex, I'm not sure why it's any different if you live in Yorkshire.

YANBU. No dazzling new economic point to make, just adding my voice to the chorus of
a) I will probably be affected by this
b) We won't have "earned" the value of the house as a family, given the rise in the market
c) It's wrong
d) How can this be the focus of people's attention when the very housing market that gives people the "problem" of inheriting more than a million pounds is also making others destitute and desperate for housing?

I'm with the OP on this one too. I started a thread about this on Saturday and got a lot of abuse too. One poster told me I sounded resentful and jealous of my own children because under these proposals they stand to inherit a lot of money without paying any tax! Eh, no. I'd like them to inherit from us but I see no reason why our estate can't have a bit of tax taken off as well.

Tax is the subscription for living in a civilised country. None of us want to pay tax, but unless we pay tax we will have no services.

ReallyTired has it.

And to add to everyone else who's said it - my husband and I have not worked hard for our house! We have been incredibly lucky by being in the right place at the right time to benefit from ludicrous house price inflation in London over the last 30 years. We levy windfall taxes on banks, why not on house prices?

I do see that a family home is a special kind of asset because of people's memories, associations and so on - but unfortunately it is also an asset that can be turned into a huge amount of cash if it happens to be in London or the southeast. Not many people who inherit their parents' house live in it. Mostly they'll sell, not least because if there's more than one child inheriting the estate has to be divvied up between them.

I agree that this decision is unfair whilst so many vulnerable people are facing a reduction in their income, and I don't think it has come at the right time. That said, in principle, I don't think IHT should apply to houses that are valued near to the average price for an area.

While the baby boomer generation have benefited from rising house prices in the SE, those that have followed have not been so lucky. DH and I are both public sector workers, and our Mortgage accounts for 45% of our joint full time salaries; elsewhere in the country, with less expensive housing, we would have had different choices, and more disposable income.

So yes we have worked hard for our bloody expensive house.

I disagree.

If there is an objection it's that the increase is too low. I admit that I have earned none of the increase in the value of my house and it is my good fortune to live where house prices have gone up substantially, but nether of those facts strike me as a good reason to prefer giving my assets on my death to HM Govt. in preference to my children.

People talk as if an estate subject to inheritance tax is being confiscated in its entirety by the government. The tax is only payable on the amount above the threshold so most people don't pay it even before this latest increase. For those who do pay it it's not that big an amount in most cases.

Example: John, a single man, leaves a house worth £400k. Current threshold is £325k. Taxi is payable on £75k at 40%, ie £30k. Whoever inherits still gets £370k.

Another example: John dies, leaving everything to his wife Mary. No IHT payable on transfers between spouses. When Mary dies her estate gets the benefit of her tax-free threshold and John's. At the moment that means they can leave £650k to their children and no tax is payable at all. Even in London now that would cover most people's homes.

This is already pretty generous - I'd be fascinated to see how many additional people are going to benefit! Will it even get into 6 figures?

I think many of you will find that your parents' house will have to be sold before they die to pay for their care in old age. This is what happened to my parents' house; I couldn't look after them as they lived 180 miles away and my father refused to move nearer to me, I had a full-time job and two children to support, and their savings quickly vanished paying for four years of care.

true goblin. my father died, leaving a decent property to my mum, she found a new partner and moved to his house selling hers (at rock bottom market) and then 100k of her savings went on care home fees. the whole thing is a lottery. i prefer people benefiting from hard work, not pot luck or inheritence

BeyondTheWall I support 100% inheritance tax. So, well, thats all i have to say really.

I'm quite right wing on many issues, but I would be in favour of that too. Inherited wealth is so unearned, so much an accident of birth and certain events. I do not see why people should not pay less on their earned wealth from jobs, rather than inheritance. That would encourage people out to work, and discourage those types who seem to spend much of their adult lives hanging around their perfectly healthy parents, waiting to be first in line over a sibling in their will. Or worse still, giving up their jobs to look after an ailing and ageing parent who really would be better in a proper nursing home, in order to save selling the house to fund care home fees (I appreciate this is hardly always the case, but it does happen).

Yes, its money you have earned and yes you might want to leave it to your children (therefore giving them one up on those children whose parents didn't), but equally your children mostly benefit from the ability to work and are taxed on that. Heavily taxed in fact.

BeyondTheWall I support 100% inheritance tax. So, well, thats all i have to say really.

The principle may be fine, like communism, equality for all, but the practicalities are ridiculous. You can't legislate to outlaw human nature. People want to leave money for their kids, that's what motivates them.

Of course it's unfair. But it's no more unfair than some kids growing up in a nice area, in a house full of books and music, going on foreign holidays, being taken to museums etc, whilst other kids get none of that.

If I couldn't leave anything to my kids, I'd quit work tomorrow. We have enough to survive on if it's just to see us out, and in due course the house would be sold, we'd rent and work our way thru the cash. I'm not sure millions of mature experienced people suddenly quitting work, and the country losing their expertise, would be a good thing. Who'd be the hospital consultants, the judges, and all those other positions occupied by people with 30 yrs experience?

It's a load of idealistic nonsense and would be an economic disaster.

I agree with you op.
Also I don't really understand why the headlines keep saying it applies to married people. How does marraige come into it? What's the limit if you are single?

We should not be compensated for crazy house prices in the South East. This is just a sop to Tory friends. Utterly nauseating when they're cutting benefits. I'm sickened that people can justify this

TTWK - I'm working so that I can help my DCs while I am alive, not when I am dead. Hopefully I'll live to an old age, so my DCs will possibly be in their 60's when I die, and will not need my money.

The real unfairness is the cost of care. If you have a long period of poor health in your old age it will all be academic-your children will inherit FA.
If you are fortunate enough to remain healthy and die suddenly or after a short illness-then you can pass on your home as you see fit.

That's true as well cheeseandham-with people living into their 90s their children are pensioners when they die.

The whole country is not the south-east. Where I live, an average 3 bedroom detached house is 120K. It'll only benefit the local Tory MP near me.

Personally, if I ever suddenly win a massive amount of money from the lottery I never play, and buy a big pad, i'll hand over the tax willingly, because my kids will still get a bit anyway, and I don't begrudge tax where it's afforded, as i've had my fair share back in education and NHS.

It's a lie that the rich "need" breaks. In Norway the tax rate is even higher and amazingly they haven't all emigrated. Possibly because their taxes pay for a great social care system.