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.

Can someone tell me why it’s fine for my hard earned wages to be taxed, but a free unearned windfall shouldn’t be?

An interesting fact here is that inheritance tax has to be paid before the money is released.

Inherited wealth is unearned and should be taxed. There is no justification for children of the wealthy receiving such huge sums. Those amounts can’t be gifted by parents who are alive without there being tax implications so why should it be tax free on death?

The truly rich can easily get around it by signing over property or other assets way in advance of their death because they don't need them to live off. It'll be more damaging to people who are living in property which has gone up a lot in value, but who can't release funds to give any of it away before they die, or who don't have access to cash to be able to plan properly.

I'm not saying nothing needs to change, but changes have to be done carefully or you'll just end up punishing the comfortably off rather than the actual rich.

As for the only child thing, I don't know, it seems to me that if you choose to have only one child, with the reduced environmental and economic impact of having only one, then it seems fair enough. It should all be taxed the same at end point regardless: if you have choose to have numerous children then you accept they will get a lot less money when you die. That's just how it works. Finances are absolutely a consideration when family planning.

No thanks.

My parents have worked fairly low paid jobs for most of their lives having both left school at 14/15 with no qualifications, not coming from backgrounds that afforded them any other choice, their incomes were needed. DM did childcare qualifications when we were young, worked for a pittance but eventually ended up managing a nursery, but for DF if he wanted more money he did overtime in manual jobs, often 60 hours a week.
They managed to buy a house and are so proud they have something 'to leave' us, they have a moderate amount of savings but that will go during their retirement and I'll be encouraging them to spend it. For the government to then take away 40% of the only asset they have that they worked their backsides off to achieve, at points they both had multiple jobs, cleaning on the side etc, would make them feel sick. Neither has ever claimed a benefit in their lives and they were handed nothing on a plate, they weren't able to bankroll me through uni or pay for cars or house deposits for us, but that house is their nest egg. In reality the money eventually will benefit our children, their grandchildren, DB and I inherited their work ethic and attitude to saving and don't need the money (although neither of us are wealthy).

I can't understand why people are so bitter about others gaining inheritance. That money was already taxed before it was saved.

People on MN are always claiming everyone has the right to do what they like with their money. So some people piss away all their money on themselves and leave nothing for the kids, that's their right. It's also the right for parents to leave a big fucking mound of money to their children if they wish. Still doesn't stop the bitter vultures coming to whine about it.

I think a better use of time and energy would be looking at tax avoidance by large corporations, such as Amazon.

@StylishMummy
There is not a direct correlation between hard work and wealth, unfortunately.
I know lots of people who have worked hard all of their lives, just to make do and not fall into debt/ hardship.
Similarly I know some folks who do not work at all yet are financially secure and want for nothing in material terms.

I know lots of people who have worked hard all of their lives, just to make do and not fall into debt/ hardship.

"Working hard" is more than just long hours in work. How about "working hard" at school to get good qualifications which open doors to better paid jobs? How about "working hard" in the workplace to gain promotions/skills etc to get better paid jobs?

Of course someone "working hard" in a minimum wage job because they have few qualifications and no interest in promotions etc is never going to be rich - why should they?

It's about "working hard" in lots of ways, not just doing a drudgery job with no prospects.

That money has been taxed many times over throughout the lives of the parents in question. This is what the have left after the tax man has taken income tax, VAT, stamp duty, and so on and so forth. There’s no end to the exciting taxes dreamt up by one chancellor after another. So the idea that people should not be passing on what’s left to their children because there no tax on it is a joke.

But generally it's only taxed above £750k and certain things do not form part of the estate. So it's still a fair amount of money to inherit even divided by 2 or 3.

I say this as someone who handed over the best part of £500k via parents estate to the taxman 2 years ago. Stuck in the throat a bit but what can you do?

@user1497207191
Blimey, someone’s coping well with lockdown
🤣😂🤣👍🏼

@user1497207191
I said “ all of their lives” not just during their working life.
Some careers are undervalued, it’s not as simple as some jobs being low paid.
😁

Don’t get why people whine about paying IHT. If you’re paying it it’s because you’ve been given (unearned) an amount OVER £325-750K. That’s a life changing amount of money even if it’s the tax. Would people really rather it was scrapped in income taxes were raised to compensate? YANBU OP, the threshold should be far far lower.

The Government don't take away 40% the inheritors have to pay the 40% before they receive the money.

*even with the tax.

But they’ve earned the money and already paid tax on it 🤷🏻‍♀️

Gen X, Y and Z have had a right shit show of it.
Leave the inheritance alone.
How about we tax the bollocks out of assets already held by those aged over 55, right now?

What? I am over 55 and my inheritance will be going to my two Gen X kids. So you want them to have it, but not me have it to leave it to them?

If people believe so strongly in working hard to get on in life, why do you want to inherit tax free money that, realistically, no one has worked hard for? Usually, there is a lot of money because the deceased person happened to buy a house years ago in an area that later became desirable. Pure luck.

And people work just as hard to pay rent as they do to pay a mortgage.

I was whacked with inheritance tax at 20...my mum died when i was 8, my dad was a manic depressive alcoholic all my teenage years and I found him dead a month after I turned 20. But because my dad had a successful career before life turned to shit, we had a nice house, and no one gave a damn to help us, all let down my this country over and over again. You call me lucky?

Pure luck.
Don't forget to tax the euromillions winners then😱

If you don't have inherited wealth, work harder to make it for the next generation
This is such a shitty attitude.

Close friend had a private education, university education, has a really good Well paid job, partly due in the beginning because of her parents connections in the industry. Grandparents died, she inherited about £100,000 in cash plus half a house.

Compare that to another friend, whose parents divorced In her preteens because they both had mental health issues. Her childhood was blighted by addiction issues and low level abuse, moving from one rented house to another, changed schools in secondary (which won’t have helped her GCSE results). She left school at 16 and did an apprenticeship and has been in a low paid job all her life, working hard to provide a better life for her own dc But only ever really managing to provide the basics, can only dream of the lifestyle of my other friend. Considering the maternal example she was given, she has done fantastically well.

Can you not see the inequality here?

In my own family, there is very little inheritance left after grandparents have paid out thousands of pounds in care home fees, so it makes no difference to us if they charge inheritance tax anyway. the government have already had the all the money anyway.

YABVU. Inheritance tax should be abolished.

I'm way more incensed by by people who buy agricultural land to avoid IHT.

Helloooo James Dyson.

That money has been taxed many times over throughout the lives of the parents in question.

Property value gain usually makes up a large part of inheritance - so no, this has not been taxed many times only.