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 ....

The distribution of funds from the sale of a house inflates the house prices? Are you genuinely saying that if Mr A inherits a house if inflates the housing market? Or if Mr A and Mrs B in inherit the house between them. Does that then inflate the housing market by half as much, or doubly so? And you presumably contend that is Mr A inherits a house and is mandated by law to give some of that to Mr C, that in some way does not inflate the housing market? That has to be the biggest load of bull I've read today. It's not maths, nor is it economics. It's jealousy, that's what it is.

Yes. I am saying it inflates the housing market. It does this by, for example, artificially stimulating the buy to let market, skewing the balance between private sector landlords and tenants, or by increasing the ownership of second homes in rural areas, bought by out of towners with large deposits, etc etc. I'm not sure this is a very new or exciting thought?! IHT could be used to tamp down the market. Not doing this is a deliberate policy choice about ramping up prices - like the policy of allowing people to buy social housing. It's also about sending a message to the market about what is valued and supported, to encourage people to buy property.

It also skews the market where there is competition. Eg the average age of a first time homebuyer is now around 36. The price is going to be pushed up when people can come along with artificially large untaxed deposits - a bit like lottery wins, if you like.

Separately there's also a really serious problem about the country's long term ability to fund private care, which is again both linked to and dependent on artificially high property prices. Eek basically.

The shame is that we all started thinking of our homes as banks etc, rather than somewhere to live.

The shame is that we all started thinking of our homes as banks etc, rather than somewhere to live.

Why can't it be both? When we bought our current house (London 'burbs), it was bought because it would make a nice home to bring up the kids, with great schools on the doorstep, 2 tube stations, nice shops, etc, that was in an area of good house price inflation so that one day when we sell it, we'll be quids in.

Why is that a bad thing? It's been a great home, and is worth £400K more than we paid for it.

Yes, it inflates the market, not only by enabling the inheritors themselves to buy at inflated prices, but also

• by encouraging them to gift amounts to their children, who then have inflated deposits to buy themselves

• by making house prices less aligned to income from work

Why is that a bad thing? It's been a great home, and is worth £400K more than we paid for it.

And those who are today looking for a nice home in the London suburbs to bring up the kids are increasingly buggered.

Householdetc price inflation hasn't been healthy, or normal, it's been out of control so that what was within reach even five or ten years ago is now near-unachievable for someone in eg the London suburbs in the same circumstances.

Unless they have access to a wodge of capital from somewhere.

And now, before Ellie accuses me of jealousy, or something equally silly, I'll point out that I'm a homeowner in the London su runs whose place is worth around 50% more than it was three years ago. That's not 'good house price inflation', it's fucking bonkers. Because who's buying locally now? Who will be able to in the future?

I wouldn't count those chickens quite yet.

We are all living longer, with increasingly complex multiple medical conditions. Three years in a nursing home decimates the capital from an ordinary house sale. Many people / couples require long term care now so even expensive houses may be at risk.

I fully expect my house to be taken for care home fees (given projections of life expectancy).

Virtually all the money people have earnt is taxed, why should a second taxation affect the property or other assets people have purchased be taxed on their death. It's just plain grabby and easy money for any government.

^we have opted out of the NHS and don't use the state education system.

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

You say you are joking, but you've made the same point twice now, so I thought it worth pointing out that without the NHS and state education system, the healthcare and education provision you are using would not exist. Where do you think the doctors that treat you trained? That's right, NHS hospitals, with all the staff who undertook their training, all the equipment they learned how to use, the buildings they worked in, all their colleagues whose roles were fundamental to them doing their training at all paid for through taxation. Similarly, how do you think the teachers at the school got an education themselves? How was their own training possible? That's right, through a tax-funded education system, which needed all the elements in place in order for the teachers to be able to learn at all. Again, funded by taxation. Now, you might be mad enough to want to pay again for something that you've already funded - that's your prerogative - but please don't pretend that just by going private what you use hasn't been provided for by the state.

Figment Inheriting a house artificially stimulates the buy to let market? Really? Artificial by what measure? Poeple have been inheriting houses in this country for the past 500 years. Skewing the balance between landlord and tenants? So these people who inherit their houses are letting people live in them, whereas, in days gone buy they would have lived in the and stopped renting where they were living? The price is going to go up when people come along with artificially large untaxed deposits. Really? So the greater the deposit that is put down, the higher the price goes? Is that how the housing market works? You are arguing that people who inherit £1M houses can sell them and artificially move the housing market because they are now able to place a £1M deposit on a new house, driving the prices through the roof.

'Well, darling. I was going to sel the house for 1.6 million, but this gentlemen can put down a 1 million deposit, and get an 8 million mortgage, so we might as well raise the asking price to 2.4 million.'

Sorry, but everything you have written still makes no mathematical or economic sense.

why should a second taxation affect the property or other assets people have purchased be taxed on their death.

Dead people don't pay taxes. This isn't a tax on dead people. It's a tax on unearned income/assets that the living get by dint of no effort at all on their part.

Jane, what's your view of VAT? CGT? Stamp duty?

This may have been said already as I have not RTFT but I would support raising IHT to 80% and scrapping income tax, that way everyone keeps what they have earned and there would be no 'I worked hard for this to pass on to my children' bollocks from the lucky few who have benefited from financial luck in the property market.

(And yes, siblings and I may inherit and the house in the SE will be worth £1.5 mil +)

I like the Portuguese attitude to vat, 6% for local or essential stuff, 13% for middle of the road and 23% for luxury/ foreign stuff. Our government could learn a lot from this approach.
Ok for small businesses 3 rates of vat is a nightmare but it seems to work in Portugal.

And the Portuguese economy is doing so well...

Money is taxed once when you earn it and most of it is then taxed a second time one way or another. Why should inherited money be treated differently?

Taxing money which has already been taxed is most unfair. How can it be better to encourage people to piss it up the wall rather than invest in fixed assets, be it property, gold, paintings, bikes, boats? Maybe it's best to put it under a mattress so it's not so obvious

innocent Again, the same BS. A deposit on a house does not increase its value or it's price. A train station has a far greater impact on house prices than the buyer's deposit. In fact the presence of a train station can be demonstrated to directly affect house values, and the side of the buyers deposit cannot (I'd certainly like to see your evidence). If you believe arbitrarily that people should be taxes because of their impact on house prices, why not impose additional taxation of rail users who's demand for service quite clearly drives up house prices? Another £4 a day to commuter rail users tickets would definitely make them think twice about moving into an area ad driving up the house prices. The premiss of arbitrators taxation just does not hold water. Taking other people's money to pay for whatever pet project you deem fit cannot be justified or equitable, because removal of a persons wealth, to give it to another who has never earned it, can never be righteous, just or noble, if you use threats of incarceration or violence to achieve your goal.

Ellie, you might find it instructive to look up the ONS figures for the last 30-50 years on house prices, mortgage repayments and in particular deposits as a ratio of (a) purchase price and (b) income. That might help you to understand what's changed in a BTL market that has changed out of all recognition in 30 years, driven by changed regulation and availability of larger sums of capital driven by eg house price inflation. Those statistics show how skewed the picture has become against owner occupiers and in particular first time buyers. To the point where a conservative government is taking (small) steps to redress the issue.

Your understanding of drivers of house price inflation is slightly shaky. In a market where demand outstrips supply, prices will rise. In a market such as this, you are seeing those with better access to more capital (from eg equity, an inheritance or a gift) placed in an advantageous position by being able to offer even slightly higher than someone with less flexible, or lower, access to funds (eg FTB who has scraped together a deposit, who can't offset mortgage interest against tax, etc etc.) The impact of those thousands of slight competitive advantages is cumulative.

You paint a picture where a house is passed intact from the deceased to an inheritor. I think that's pretty unusual, more likely it's sold as the estate is divided among various beneficiaries, all of whom receives a portion of capital to do with as they please. That may be paying down their own mortgage, or a series of fancy holidays, or just as likely its invested - and we know that many people see BTL as a 'safe' investment. Contributing to the impact seen above.

The people inheriting the asset haven't paid tax on it before.