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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

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

281 replies

DogsDinner · 10/04/2020 19:36

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.

OP posts:
Statistician999 · 10/04/2020 21:21

@Alsohuman

That’s not the point. The government is not getting the care home fee. BUT they are not paying it for self funders so that is a direct saving. And where I live, many self funders ARE in the same homes as LA funded residents who are paying roughly a third of what the self funders pay. So self funders directly subside the LA residents,

Also the government tax the profits of the care homes and the earnings of the staff.

Notthetoothfairy · 10/04/2020 21:22

It has been taxed! How many times should the same income be taxed, just to satisfy your jealousy?

Alsohuman · 10/04/2020 21:24

Why should the taxpayer foot the bill for a care home for someone worth hundreds of thousands @Statistician999?

Bathroom12345 · 10/04/2020 21:24

‘No tax on property value gain’? I don’t understand.

Let’s say Parent brought a house in the 1960’s for say £20k. Now worth £800k. I am sure it’s not right that if child sold it after parents death there would be NO inheritance tax to pay on that gain.

Unless I have got myself mixed up!

sunfloweryy · 10/04/2020 21:25

Nobody is penalised for working hard by inheritance tax. It happens after you are dead! How people can say that their hard working/saving/always going without etc parents are being penalised by THEM not getting over £750K tax free is beyond me.

Barrique · 10/04/2020 21:26

It has been taxed! How many times should the same income be taxed, just to satisfy your jealousy?

No it hasn’t. Property gain is not taxed. Buy a property at £30k and die with it worth £600k, what tax has been paid?

sunfloweryy · 10/04/2020 21:26

Sorry meant to tag @fascinated

Bathroom12345 · 10/04/2020 21:28

But what about someone who has a house worth say £250k. A relative of mines care home in London is £70k per year. These are not multi millionaires.

£250k is not going to last long. Maybe it’s better to blow your money in advance?

Alsohuman · 10/04/2020 21:30

Are there still houses in London worth only £250k?

Statistician999 · 10/04/2020 21:32

@Alsohuman

That is not what I was saying at all.

I am merely pointing out that if people did not believe they could pass wealth on to the next generation they would spend it (or transfer it) when they were younger. This would leave the government with an even bigger elderly care bill.

(And btw I all about intentional deprivation of assets - and the workarounds)

fallfallfall · 10/04/2020 21:33

but the government gets to keep most of the unclaimed state pension do they not?, the younger they are the bigger the "savings" especially if they die shortly after retirement. isn't that money enough?

Alsohuman · 10/04/2020 21:33

OK, sorry, I misunderstood you.

Hippee · 10/04/2020 21:34

I have a friend who already frittered her half of the divorce settlement on a luxury car, holidays for her and the kids and ended up having to borrow her rentals deposit from a partner. She's now doing the same with money from an inherited property. I have chosen to live more frugally to help my children with (hopefully) their first house purchase. Maybe I should have just taken them to Disneyland and bought a Porsche because my children don't deserve to get anything from me.

sunfloweryy · 10/04/2020 21:34

@statistician999 is that really true if most of the wealth is coming from a property that they live in? I doubt many people would chose to move into a bedsit just to avoid IHT. It’s still nice to live out your last years in the home you’ve worked all your life for.

Bathroom12345 · 10/04/2020 21:34

Sorry. It wasn’t a great example but £250k is a great deal of money but not when it comes to care home fees. My relative had a house worth £500k. He is likely to need care for 8-10 years, maybe more.

Arnoldthecat · 10/04/2020 21:40

The best thing to do is plan ahead. Dont have money or assets within the system. Buy a nice fat chubb safe and put money/gold/jewellery in there. Its untraceable by the state who will tax you to death.

Andante57 · 10/04/2020 21:40

Anyone who is receiving inheritance is privileged and it most certainly should be taxed. And I say that as an only child who will be the sole beneficiary of my parents' will.

Waxon -so should your parents die while the present tax laws are in place, will you pay the rate of tax that you think should be paid on inheritance?
How much should it be? 75%? 100%?

sunfloweryy · 10/04/2020 21:43

I think £100K per person untaxed is a generous amount Smile

Alsohuman · 10/04/2020 21:47

Buy a nice fat chubb safe and put money/gold/jewellery in there. Its untraceable by the state who will tax you to death

Bit difficult to live in a safe.

CendrillonSings · 10/04/2020 21:47

I think £100K per person untaxed is a generous amount

Fortunately the elected government disagrees Smile

Toilenstripes · 10/04/2020 21:49

I hate the jealousy in this country

AnnieAnt · 10/04/2020 21:52

as been taxed! How many times should the same income be taxed, just to satisfy your jealousy?

No it hasn’t. Property gain is not taxed. Buy a property at £30k and die with it worth £600k, what tax has been paid?

This is my thinking - we have worked hard for our house and it is our main asset. But we have not put in what it is worth now - we have been very lucky in terms of when we bought, where we bought and low interest rates. And really we bought it to live in, not as an investment, and it's served its purpose for that. This is the case for many people (I appreciate not all) and I cannot understand why there is no tax on property gains on sale - all other assets are taxed (shares etc). By all means allow people to keep what they've paid plus part of the profit but that's money that would massively help out the country.

sunfloweryy · 10/04/2020 21:52

@CendrillonSings I know Grin

And I still say that despite both of my parents having a lot of dollah in property!

Original poster
DogsDinner · 10/04/2020 21:56

I don’t know why people keep saying it would be taxing the money twice. We have to pay tax on the money we earn, and often work very hard for. Almost nobody pays tax on inherited money which people get without having to lift a finger.

It is surely earned money that is taxed twice, when we get it, and when we spend it.

OP posts:
Barrique · 10/04/2020 21:59

Fortunately the elected government disagrees

And see the Resolution Foundation’s findings about the best way to support low and middle income families with respect to inheritance tax.

Not really chiming with Tory policy.

www.resolutionfoundation.org/app/uploads/2018/05/IC-inheritance-tax.pdf