To think post covid19 would be a good time to completely overhaul inheritance tax?

[DogsDinner]

I know a couple of only children who are likely to inherit the best part of £750,000. Other families where the kids will inherit hundreds of thousands each.

Not a penny tax will be paid on this money.

I also have friends who will inherit nothing, indeed will probably have to scrape together the money to pay for their parents’ funerals, and in turn are unlikely to be able to leave much to their children.

AIBU to think that people who have probably already had a very good start in life, should not then go on to be further advantaged by inheriting such staggering sums tax free?

I’m not a socialist, and I do think parents should be able to leave their children something, but surely it should at least be taxed?

It honestly seems to me to be the obvious place to start raising money as we try to repair the damage to the economy.

Tiedy,

I agree with your post, people who inherit large sums have often already benefitted hugely from growing up in a comfortable family, both from the opportunities that gave them, and financial help.

TweenQueen,

People will always want to hang on to their money on an individual level, that’s why we have taxes!

@WitsEnding

Inheritance tax is paid on money that is inherited. It's not paid by the person that left the money, they are dead.

That is simply not true. Tax due is based on what has been left by the dead person, not on what is inherited by each beneficiary. There could be one person receiving 100% of the estate (after tax if payable) or it could be being shared out between ten different people. Those people are not taxed on what their receive, it would be fair to tax them on what they receive because it is basically an unearned gift, but that’s not what happens.

The dead person pays the tax on what they have left in their estate. The beneficiaries only get what is left over.

To me, that seems so so wrong, and it’s the reason why I’ll do everything possible while I’m still young enough to give my dc what I have to give. And I’ll enjoy the money. If that means the government ends up having to pay for care that I could have afforded myself, and would otherwise have been willing to pay for, then so be it.

Inheritance tax is a fair tax in my opinion, but I do think it should be abolished.

Instead they should tax all income received by the beneficiary like any other income. All income should be taxed a receipt from an inheritance is no different.

I started with fuck all and have earned every penny I have working 80+ hour weeks for years in a job I hated, but endured for the money. Along the way I have paid a huge amount of tax.

Thanks to a divorce from abusive cheating exH, I have a lot less than I used to, but I still own my own home mortgage free and have a small pension. I intend to work until I die so the pension is available for my DC.

I want to leave everything I have to ASD DC who is a vulnerable adult. If I did and there was no IHT he would just about be able to manage. Certainly not rich, but would not starve. He would be able to lead a very simple life staying at home and walking to the local supermarket to buy food once a week, which is what he likes to do.

Thanks to Gordon Brown, a Labour politician, I can't leave it in trust for him, which would be the right thing to do to protect him, because trusts are taxed. You can only get a disabled person's trust if you get higher rate DLA which he will never do because the thresholds are set for physical incapacity, not vulnerability.

DC is too able for any support which is available because he tests on the low end of normal (believe me I have looked and looked, there is fuck all out there) and too vulnerable not to be sheltered in some way. He can't make a phone call or articulate what he wants to a stranger, he always gives in if someone bullies him and there is no way he could navigate the benefits system.

Because I am a single parent the amount I can leave him is less than the IHT threshold.

Unless we emigrate to a non IHT country, such as IoM or Italy, the house will need to be sold on my death so DC will lose his home, will have to live off the post tax sale proceeds until they run down below £16k and then claim benefits - and I'll tell you now, he will be one of those people who starve to death because they cannot comprehend the system.

All so the state can take its 40% of my already taxed income.Or IHT could just fuck off and my DC will never be a charge on the state.

@Clickbait12 how much do you have to leave as the threshold is pretty high

I agree with you. Both my parents have worked every day of their lives but they live up north. We could sell this house in Bristol and buy 4 of each of their houses. At the end of the day they're working class and have had to spend their earnings on living costs and they have been disadvantaged by divorce, it's expensive buying 2 homes etc. My husband's families both benefit from inherited wealth which we now benefit from. We don't deserve it, and although we also work hard it isn't fair. It also drives me crackers when I hear about my husband's grandma being too poor to buy a book for his birthday (she lives in a £500k 4 bed house) or my sister in law being skint (in an £800k house) It's hard for people to be objective about money. If it's any consolation it also damages, there are lots of miserable immature grown ups that can't stand on their own two feet. My colleague is 47 and her dad still buys her bus pass, it's pathetic. One benefit of not having an inheritance is being able to live your life how you want.

@Clickbait12, you can leave him £500k without incurring inheritance tax if you include your house.

It also drives me crackers when I hear about my husband's grandma being too poor to buy a book for his birthday (she lives in a £500k 4 bed house) or my sister in law being skint (in an £800k house) It's hard for people to be objective about money.

Obviously it is hard for people to be objective about money. It’s is very easily possible for people to be asset rich and cash poor. Your husbands grandma could easily have nothing but a small pension to live on, the amount of cash she has to spend month to month will be similar whether she lives in a £500k house or a £150k flat. Except a house comes with more expensive maintenance costs, so she’d have more actual money if she lived in the flat. Why does it drive you crackers?

Inheritance tax should be abolished.

It's not 'tax free money'. It's already been taxed at least once. Called income tax. Inheritance tax is pure theft IMO.

It's not 'tax free money'. It's already been taxed at least once. Called income tax. Inheritance tax is pure theft IMO

House profits accrued over 30-40 years have never been taxed, no income tax is paid on them. Nobody inheriting more than £500k to £1 million in unearned money can complain if they have to pay tax on the residue. That’s not theft.

Personally I don't see the point in inheritance tax, and I say that as someone who will inherit nothing.

It's just daylight robbery. Whoever earned that money paid tax when when they earned it and then paid tax on the interest. Why should they pay tax again when they die?

It's not the children's fault that they have affluent parents. It's just the government being greedy and highlights others insecurities and jealousy about money.

It was explained to you that no tax has been paid on the bulk of an inheritance just six minutes before you posted @MotherofKitties.

House profits aren’t really profits though, especially not until a property is sold. The profit doesn’t exist to be able to tax it until sale. The value is placed on a property is meaningless until it is actually sold. Or do you think tax should be paid on a meaningless estimation of what a house might sell for?

It’s not even profit in the true sense of the word. It’s not like people still have the same house plus whatever it has increased in value in cash. A house is a house whatever value is placed on it. And as all the other houses have gone up by the same value, profit doesn’t really exist.

If I bought a house 20 years ago in the hope that I could leave it to my children in future, it makes no difference what it’s supposedly worth. I’d still want to be able to leave a whole house, because I bought and paid for a whole house.

That’s why inheritance tax is unfair.

That’s why inheritance tax is unfair

Most taxes can be deemed "unfair" but if you want a good NHS and decent wages for nurses etc then it has to be paid by someone!

I wonder how many bitching about IHT also go out and Clap for the NHS each Thursday?

Fwiw when i die, my DD will have to pay IHT and so she should,

I wonder how many bitching about IHT also go out and Clap for the NHS each Thursday? oh perlease, this line again.

The value is placed on a property is meaningless until it is actually sold. Or do you think tax should be paid on a meaningless estimation of what a house might sell for?

That’s why property valuations for probate are always pitched low. I did up my parents’ long neglected house before I put it on the market and got substantially more than the probate valuation. It was, however, valued for probate in the state it was in when they actually died.

@OnlyFoolsnMothers

Mine is a valid argument, yours isn't any argument at all... Perlease! FFS

You may be able to live on good will and kind thoughts but most people need money and NHS is paid out of taxes, less taxes = less public services, even you, surely, can grasp this simple fact ? lol!

Both myself and dh have lost our parents prematurely. One of the Estates was subject to IHT on a proportion when the
Limits were lower. The worst part is that you pay IHT based on house valuation rather than what was actually realised. Also I believe on personal effects which were donated. Under the new limits IHT wouldn't have been payable.
It is really insensitive to tell someone they are lucky when their child will never have grandparents to dote on them.
Had dm not died prematurely of cancer no doubt she could have given away more of her savings thus removing tge Estate from IHT altogether.
Also I accept that the appreciation in house value has not been taxed but the income used to buy the property in the 1st place had.
Also dont forget that the baby boomers so hated on here benefitted from low house prices but also high interest rates and negative equity.
Dh and I also paid more stamp duty on our 1st house purchase than ithwrs who purchased after us.

good from a POV that fewer people will be paying attention, but I rather think that HMRC have their hands full with the furlough, self employed grants, SME grants, more people dying........

I would abolish it as Sweden has done.

If IHT thresholds were reduced my parents would spend more money on holidays, for themselves and me and my DC. They’d probably have a fancier car and eat out more. So it might boost the economy but it wouldn’t go directly to the state and a lot would be spent abroad.

Instead they do as my grandparents did, live comfortable but not fancy/luxurious lifestyles and save as much as they can to leave for their grandchildren if they do not need to spend it on care as they age.

The worst part is that you pay IHT based on house valuation rather than what was actually realised.

You can claim a rebate from HMRC if a property sells for less than probate value if the sale is within 4 years of the deceased’s passing.

@Alsohuman Arguing against my opinion when I was clearly talking in general terms, not just about your specific example, is a bit pointless. I stand by what I said. I don't think there should be any inheritance tax.

I didn't know that. Thanks @Barrique