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 ....

Yes, because people who educate themselves, work hard, are diligent about saving what they work their whole lives for, and try their hardest to instil the same work ethic and financial values onto their children, are the ones who should be punished in society.

Interesting post. You seem to be taking as your basic premise that people with wealth started with nothing and accumulated it all through hard work.

No inheritances themselves, I guess, or accumulation of untaxed capital partly as a result of government policies?

I do get a mild giggle out of people arguing that all people are trying to do is instil work ethic and 'financial values' to their children at the same time as arguing those selfsame children should get a tax-free handout.

oddfodd Yet they were intelligent enough to buy a property in a capital city instead of the industrial heartland, and of course, no-one in 1955 could have predicted the decline in manufacturing and the emergence of technology?
You provide a perfect example of the difference between someone who is prudent and invests wisely, and someone who does not, and that in some way justifies why one person should have the fruits of their labour taken from them and given to those who didn't earn it?

jassy Putting aside the very provable fact that 9 out of 10 millionaires are first generation rich and that two thirds of those come from the working classes, not the middle classes, no, that is not what I am saying.

What I am saying is, if you work hard your entire life, and you build a nest egg to ensure you provide for your family once you are gone, be that the business you built, or the house that you bought, or the rare collection of shells from the turn of the century, you should have the right to do with your equity what you wish. If you wish to give it to the poor, you are free to do so, and if you wish to give it to your daughter, you should be free to do so. And the state should not be pandering to those who choose not to avail themselves of hard work and education, choosing that you should not be allowed to give your wealth to your child without first give the state it's cut.

We all have the same opportunities. It's just that some take them, and others choose not to and complain about it. Giving your child what you have worked for is not 'a tax free handout', it is a natural human instinct. You may very well wish to remove the rights of parents to provide for their children, but that is also natural human instinct. It is envy, greed and sloth.

For those who are going to benefit from this but think it's wrong - there really isn't anything stopping you from paying the tax you feel you should.....
Yes there is, hypocrisy.

Ellie - for most people it's about a home to raise their family in, not a prudent investment. What a bizarre take.

In a post of staggering nonsense, this bit stood out:

We all have the same opportunities. It's just that some take them, and others choose not to and complain about it.

Which is laughably and demonstrably untrue even if it weren't on a thread about inheritance.

Giving your child what you have worked for is not 'a tax free handout', it is a natural human instinct.

Why do you think the two are mutually exclusive? What an add notion. It may be human instinct - but it is difficult to see how it isn't a handout to an individual or individuals, now without tax. They've not earned it, other than by accident of birth.

What's your source for your 'millionaires' stat, out of interest? Sounds worth looking into. Of course, that's not quite what the IHT changes are about...

You can take your hackneyed 'jealousy' cliche elsewhere, btw. I had a privileged upbringing, but have built a life in Britain from scratch as an immigrant who arrived with two suitcase and a few grand in my pocket. I've done very well, I stand to be able to leave a decent inheritance to my children should I pop my clogs before it's spent. And that's withoit what I or my children are likely to inherit from my own parents, which is significant. However, I feel lucky to haveva tiny bit of self-awareness and perspective, which many people seem to lack. Hopefully I'll succeed in passing the same to my sons - it's an awful lot more useful than any money I'll be leaving them.

If I don't object to VAT or banded income tax, how could I possibly object to inheritance tax?

Ellie I find your thought process very strange. do you really think that everyone has had an equal opportunity to buy property in London? And even if that were true do you think it would be desirable for everyone to do that?
I'm another who stands to benefit from these changes and I'm another who thinks it is a disgusting change.
I quite agree in the importance of hard work and wise investments, and that's precisly why I don't think I need/deserve/want a massive tax free windfall whilst people are struggling and having their benefits cut. It's just wrong.

how about 100% IHT and everyone gets a "being an orphan" benefit of £1m. Oh wait, unintended consequence of lots of murdered parents.

Hi I'm the OP. Watching this thread with interest! Nice to see how many people agree with me - while the usual nutters eg Ellie - are out in force.

At the start I was challenged to give 10 reasons for my post in order to be taken seriously. Lots of the obvious points have already been made, so I'll just add a few more (my children are beneficiaries of this policy btw unless (as is perfectly possible) there is the mother of all property crashes before I die):

1. The rate of jobs growth is much higher in London than elsewhere in the uk. Yet these jobs are much easier to secure by children whose parents live in or around London or whose grandparents can provide a slug of cash. Giving a leg up to Tim nice but dim doesn't exactly help our productivity.
2. Unpaid or low paid internships exacerbate this problem. Finding £500-£700 per month for your room would be a challenge to most young people.
3. Tim benefits in all sorts of other ways too, because large amounts of inherited cash open the way to enhanced cv building study, travel opportunities etc
4. Osbourne is supposed to be a historian, but he needs to get some historical perspective. I don't like this trajectory. People seem to think western democracies are peaceful conflict free places and that it was ever thus. Not so.

5 unequal societies become increasingly shit places to live - for everyone. I'm not sure that I want a country in which the 50% of asset rich property owners lord it over the 50% of non property owners. All rather unpleasant. Morlocks and Eloi anyone?

1. England has really serious problem with property inflation. 62% (at least) of our GDP is represented by equity in property. No wonder productivity is so crap. Many young people can't afford anything after paying rents etc - so the traditional old fashioned British response to unrest - let the poor buy fridges, small cars and cheap flights - isn't going to work anymore in the long term, before you even get started on tuition fees. Osbourne should be trying to control the property market - not blowing it up like a balloon - especially looking at what is happening in china - we should be worried.
2. Even if you are not Christian, you must see some ethical issues here - and if you are, perhaps you are planning on paying for some prayers to be said for you in the old fashioned way. Otherwise it's going to be pretty toasty where you're going.
3. It's ghastly to see vote buying in action. So fucking tawdry. Sorry!

Anyway, enough reasons. Must get off the train...

As I said before. Nothing to stop you writing a will giving what you think you should pay in tax to the state..

No, I didn't think so!

It staggers me that people who make poor choices, who think it is their right to stay at home supported by the state often, who decide to not to gain extra qualifications because it is all too difficult then want a share of something someone else has gained. What about putting your hand out for a share of a lottery win or demanding that the winnings be taxed? After all that winner hasn't worked for the money. It is luck...

If anyone wants a state where everything is equal - I hear North Korea is nice.

Of course calling people 'nutters' helps your argument

How is not having wealthy parents a "poor choice"?

Our house is worth a million. However, this is because my DH chose to move near London for work. I am a Londoner so was already here. We stay here for the vast choices of jobs, funny that some are complaining that there are no roles where they live (what I think they mean are that they don't want to take them - which is something different although!)

Half of our will is made out to various charities. The rest should there be any left are for the children. And that is no one's business but ours. I certainly am not about to leave it to people with their hands out for yet another handout because somehow it's not fair..

Hillingdon If anyone wants a state where everything is equal - I hear North Korea is nice.

That's what I don't understand about the supporters of wanting to leave up to a million for their children, tax free.

How on earth is that fairer than taxing people on their income from paid work?

Inheritance tax merely taxes a chance of birth. Those people wishing to leave millions tax free to their children presumably brought those children up capable of earning a living for themselves, of having ambition and motivation, and of not needing a leg up over their contemparies? Or maybe not?

It is a main contributor to house price inflation. Tax free massive inheritance also means that no matter how hard a person without wealthy parents works, they will never catch up with someone who gets a leg up in life, unless they are unusually exceptional.

And its hardly only the south east in which massive tax free handouts from the sale of parental property are likely to be given. Go to any large city in the UK, and family homes of more than half a million are plentiful.

Nothing to stop you writing a will giving what you think you should pay in tax to the state.

Which simply entrenches greater privilege among an even smaller group of people. There are some of us who care about a structurally more fair society.

I shall congratulate my children on their outstandingly good choice to be born to solvent, middle-class, well-educated parents who had some stonkingly good pieces of luck in their lives (such as when we managed to get on the property ladder compared to some of our peers).

I know I'm very proud of having made that choice for myself.

Hillingdon - what's your view on VAT and income tax?

8. It's ghastly to see vote buying in action. So fucking tawdry. Sorry!

I agree with you on this one OP. There was no great need for this, if anything there was a great argument for increasing inheritance tax, to reduce the budget deficit and in line with austerity cuts.

Imagine if the 40% rate of income tax had been reduced to say, 30% instead. Imagine the criticism! Yet that's money that hard working people earn. And I can imagine that it would motivate a lot of people to work harder and revitalise the economy too - I certainly know people who don't push themselves as hard as they can so as to avoid paying nearly half of any increase in pay over the limit (inc. NI) in tax. e.g. I know a contractor who pretty much stops working each year when in danger of passing the 40% tax limit.

Poster, your parents could have made bad choices. The woman could have had kids before they really knew the man they were with. You only have to look at the lone parent board to see the poor choices some have made and the name calling re their partners. It is rare for anyone to say 'how could I have been so foolish'

I have a SIL who makes the same old mistakes re men then expects the family to rally around when it goes wrong - her choice of course but she wouldn't dream of wondering whether she needs to check her judgement. She is a classic victim, never her fault, always someone else, she had no choice etc etc.

Poster, your parents could have made bad choices. The woman could have had kids before they really knew the man they were with. You only have to look at the lone parent board to see the poor choices some have made and the name calling re their partners. It is rare for anyone to say 'how could I have been so foolish'

Hillingdon, that doesn't answer the question of why that's a poor choice by the child.

However, it's interesting that you seem to think (or present that) taxes only go to welfare spending?

My DS is working as we speak in a role he got when he mail shotted local companies. He got 2 offers with no experience. He is waiting to go to university.Yet I see young people of his age in Slough hanging around the shopping centres with their friends the majority with a child or two who clearly have little in the way of what they see as options. Slough is 20 mins by train into London, there are jobs everywhere yet these young people make poor choices. Why?

The child will often follow their parents example, they see them in low paid shelf stacking roles or not working at all with no real male role models is it any wonder they just repeat.

Of course I dont think that taxes all go on welfare spending but we have opted out of the NHS and don't use the state education system.

Could I get my money back (only joking!!)

We will pay inheritance tax, I don't mind. My child (still to be born) will have plenty left over, the entire amount below threshold in fact as there is only one of them so far.

Both sets of our parents will pay millions in inheritance tax, but they will have more still to pass down. It's only fair to redistribute such good fortune. Yes, generations of our family have worked hard, but they also had tremendous luck and it wasn't all just good choices.

The child will often follow their parents example, they see them in low paid shelf stacking roles or not working at all with no real male role models is it any wonder they just repeat.

And what's been shown, repeatedly, is that there are numerous (state) interventions that can help to break cycles of low expectation and low aspiration.

They cost money, though. Where should it come from - higher income or consumption taxes, or from taxes such as inheritance tax that often focus on wealth earned by capital gain rather than work, and that do not disadvantage the individuals who accumulated said wealth?