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 ....

Hillingdon, your comment about people who've made poor choices moaning doesn't make sense. Most of us on this thread who have objected to this change have said that we personally would benefit from it, but can still see that it's wrong.
So in your eyes we are people, or our families are people, who have made 'correct' choices ( which is a ridiculous statement imo) but we can still see that this change, at this time, is morally wrong.

What about the scenario where the child makes good choices, despite the bad choices of the parents (other than obviously the child's extremely poor choice of not being born to valuable property owning parents in the first place?) Lets call him Child B.

Child B's parents live in a succession of rented flats. They hold down jobs, mostly, in semi skilled areas and get by, mostly. Child B is clever and works hard at school, goes to university and qualifies in one of the professions. By the age of 28, Child B is earning 50k pa. They wish to buy their first home, but can't find anything for 3 x their salary plus the small deposit they have eventually saved by not going on holiday, not buying cars, etc.. Eventually, after meeting their wife to be, who works in a similar job, by the age of 33 they both manage to buy a one bedroom flat together within commuting distance of the expensive city they have to live near for work. They would love children, but cannot afford for either of them to reduce their working hours or go on maternity leave for another 5 years at least.

Child A, Child B's work colleague earning the same salary, is born to parents in a provincial city, whose home is worth £650,000. Child A along with her sister, inherits half of £650,000 free of inheritance tax at the age of 28. This windfall of £325,000 means that after buying a nice car, going on some fabulous holidays and so on, they have £275,000 to buy a nice flat and pay stamp duty and purchase costs.

Incidentally, Child C, Child B's brother, knowing that he has a big inheritance coming, has never bothered going to university or working regularly. He has the sense to use his windfall to buy himself a studio flat, so he can continue his lifestyle of peripatetic low skilled work and long foreign holidays.

Who made the bad choices in this scenario and who ended up the best off? Its a very normal scenario in society today.

So those people.who are objecting to the raise, even though they will benefit from it - are you going to take steps the ensure that every penny that would have gone to the state had the new threshold not.come in, will still get there?

Or are you only willing to help those less fortunate if you are forced to do so by the government?

I support lower income taxes, which would encourage and reward more hard work and effort. It seems crazy that I am currently a beneficiary of more money than I could ever earn working. Of course, that could change at any time, so I will never take it for granted and will keep working and hope I don't come to this money any time soon.

The change has happened. You can find it morally wrong so please go ahead and do what you need to do. I am leaving half the estate to various charities. I bet no one on this thread saying they are against it will write a will leaving xx to the state!!

NoStannis, we as a family will give more in charitable donations than the state has given us as extra tax free income. I don't trust the government to use the money well.

So those people.who are objecting to the raise, even though they will benefit from it - are you going to take steps the ensure that every penny that would have gone to the state had the new threshold not.come in, will still get there?

Asked and answered. Also a tired argument that misses the point.

The change has happened. You can find it morally wrong so please go ahead and do what you need to do.

Such as campaign against it, vote for parties with more sensible policies and encourage others to do the same by pointing out the inherent lack of logic in such policies?

Grand. Thanks for the endorsement.

Still nowt on your view of the fairness of VAT, income tax or SDLT relative to IHT, then?

I agree with you op - and I'm one of the ones who stands to benefit from this ill thought out policy.
I think IHT should be scrapped altogether though and replaced with a fairer 'Inheritance windfall tax' payable by the beneficiary/s. For example, each 'child' receives 100k tax free and anything over that amount is heavily taxed.

How does it miss the point? There are plenty of people out there who sanctimoniously go on about this sort of thing, but when it comes to the crunch, given the choice they choose to keep their money rather than hand it to the state. Look at the rate of IHT avoidance. It's just hypocrisy.

Swings and roundabouts for me. It's likely to mean my kids won't pay IHT when they otherwise would have to but I'd have much preferred not to have had to lose £800 net per month because my hours were cut (L.A. post). That's not for entirely selfish reasons either. The cuts to my department have had a direct impact on service users who are vulnerable people. So overall, great for my relatively privileged kids and fucking rubbish for me (loved my job-hate it now) and my service users.

And I know it's not as simple as that but there we are.

I'll quote myself, then. I posted less than an hour ago, so it's pretty easy to find:

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.

Individual action is unlikely to have the net desired result and could actually make inequality (based on tax-free handouts to inheritors) worse.

Are you suggesting that those who aggressively avoid IHT are the same people arguing in favour of lower thresholds? Interesting.

Jassey - lots have stated what they are going to do. You can spout off about it being unfair and now it seems that if you put your money where your mouth is it will somehow make it unfair.

Funny that....

My parents live in a country with no inheritance tax. They have, through a combination of hard work, informed risk-taking and luck, developed sizeable wealth particularly in the last decade.

So my siblings and I stand to inherit that wealth tax free. If my parents died tomorrow (unlikely, thank god), the first thing each of us will do is pay off our mortgages, or potentially buy a new home. That's fairly common behaviour among people who inherit while they are still paying for their homes.

That money therefore does fuck all direct good for the economy, although longer-term our spending might increase, but probably not by a commensurate amount. In my case, the money I inherit will definitely do fuck all good for the economy of the country in which the wealth was accumulated.

Far, far better for my parents to have paid lower income or consumption taxes during their lives, encouraging spending particularly at high-pressure points of their lives when money was tight and very little was saved. It would have been better for them, and better for the economy. And then their estate would be taxed at the end - no impact on them, and I still get a chunk of money or assets I did nothing to earn, just less than would otherwise have been the case.

I think generally the tax threshold is fine. Often people who earn good salaries will opt out of state and generally out of NHS cover. That is surely a good thing.

State education - not state..

Jassey - lots have stated what they are going to do. You can spout off about it being unfair and now it seems that if you put your money where your mouth is it will somehow make it unfair.

Where did I say what I was planning to do? You're making some rather large assumptions - but you're also ignoring the point I made in favour of a personal attack. What a wonderful standard of debate.

Donating a certain percentage of my estate to the exchequer would be in no way unfair to me, or to my inheritors. If done by a significant but not critical number of people, it could make an already idiotic situation even worse. Always best to think things through to the end, I find. Aids that 'good decision making' some people on this thread have been talking about.

Still no answer on different forms of taxation? Funny that. But then you do seem to have a problem with people talking about what should or should not happen in public policy rather than focusing solely on the microeconomics of their own circumstances and the circumstances of those they judge...

Our parents are in a nursing home so there will be no house to inherit and no help for our dc. It is so sad as they slaved their guts out to pay for their houses. One rule for the lucky ones and another for the unlucky.

Meanwhile pensions are being raided to pay for it. I don't have a pension big enough to be affected but I think that the policy is all wrong.

My view is actually that I disagree with this threshold raise because I feel that if the country isnso broke that we have to make cuts to the most vulnerable in society then how can we afford to let this money go higher up the chain?

However, me and my family live in a lovely home, a significant chunk of which was paid for by an IHT avoidance 'gift'. We also stand to benefit from the new raised threshold. We are incredibly lucky and I will be forever grateful to my MIL for it. It means my children will grow up in a lovely area, will go to good schools and wi have opportunities that man other children will never get. We also give some money to charity (although probably not as much as we could being absolutely honest) and when the kids are older I hope to do a little bit of volunteering or something.

However, if you were to look up 'champagne socilaist' in the dictionary, there would be a little picture of my MIL right there. Of course when she pontificates about 'the rich getting richer' what she actually means is 'people who are richer than her'.

Given my own circumstances, even though I disagree with this change, I choose to shut the fuck up about the entire subject in real life because I don't want to come across as an hypocritical tool. A few people I know, not just my MIL, choose not to do this.

I imagine that I am not the only one who feels like this, although I could be wrong. I imagine I might get flamed for daring to admit on mumsnet that I was complicit in IHT avoidance, but there you go!

Thoroughly agree with what Chandler said.

The next generation, or even this generation, who are making all the right choices , will never get to be on the same footing as those whose parents happened to buy a house in a desirable area.

Signora I think IHT should be scrapped altogether though and replaced with a fairer 'Inheritance windfall tax' payable by the beneficiary/s. For example, each 'child' receives 100k tax free and anything over that amount is heavily taxed.

Not a bad idea. But I'd bring the tax in at 30k. So as not to distort the property market. But to allow parents to leave something to their children.

Jassy your views coincide with mine. DH's parents house is worth around 650k and its nowhere near London. Along with other sources of wealth, including their other homes (2), he stands to inherit half of rather a lot.

I've thought about this, and to be frank, I don't really want it. It would come too late in my life to make any great difference, I don't need it as much as some people. I've seen how his sibling has hung around the same town they were born in all their lives, doing little with his life, while DH has been threatened with being left nothing if he didn't attend various family events (yes, actually threatened). His reply was that he could not take extensive time off work without notice (he works in a different city far away) and his attendance was based on his love for his parents, not whether or not he inherited a fortune. The whole family are obsessed with inheritance, including all sorts of other members. Many members of the extended family have had huge arguments about inheritance unfairness between siblings and now don't speak as a result. They're mostly all wealthy in terms of owning large houses as a result of inheritance, but few of them have ever achieved anything in a recognised career, with (very) early retirement and giving up work being the norm. It regularly forms part of their dinner table conversation. They seem to assume we are some sort of poor church mice, desperate for a chunk of their fortune. I hate it. I've made it clear I don't want the benefit of anything, and it puts me off seeing them now.

I cannot see how any of that is useful for society.

Love the conflated argument between working hard and earning your own money which hence leads to the no need for IHT and helping out ones own children.

Lets be clear, most people on this thread who stand to benefit from it will be in their 50s or 60s when this unearned windfall comes their way, its not looking after ones children more entrenching privilege.

I was just thinking it is all a bit redolent of Dickens. So many characters are knocking about in the hope of Great Expectations, and there are quite a few young men not bothering to pursue a career (Bleak House) because they expect something to come their way. I was reading some book or other as well, a 1930s one I think, where the father was much castigated for not managing his investments better so as to provide a good inheritance.

Perhaps this will become more common again...

OP YANBU

Hideous policy (and I am likely both to receive and leave an inheritance affected by this so this isn't jealousy).

The side of this that doesn't get enough coverage is that this is yet another transfer from young to old.

Typical age at second death for a couple is high eighties/nineties. The inheritors will most often be in their sixties.

To fund the £140,000(!) taken from the state via this tax cut, other taxes will have to rise. These will generally be paid by the young/middle aged.

The talk of family home and children gives a massively misleading picture.

When my ds's Great-grandma dies, will her children (already grandparents) move into the "family home"? Of course not - their family home is the one they raised me in. It will be sold, the same as the vast bulk of these "family homes".

Why the government have decided is to give take £140,000 the state would have had and give it to someone who has just received £1m they did nothing to earn. As noted often above, most of this £1m wasn't earned by the person leaving the money either and has never been taxed.

longtimelurker Lets be clear, most people on this thread who stand to benefit from it will be in their 50s or 60s when this unearned windfall comes their way, its not looking after ones children more entrenching privilege.

You are right. Its gifts without reservation that need to be tackled too. It inflates the housing market and prices ftbs who don't have parental help out of the market.