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.

This highlights the benefit of only have 1 child. Not sure about no IHT, it is only worthwhile putting things in trusts and companies if there is multi £s involved

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

What happens if they don't have the money ?

This is, as usual, a London centric/SE problem. Houses in most of the country cost far less than £500,000. Many do not incur this tax

You're missing the point. The income was taxed when earned by the first person. When passed onto their beneficiaries I think it's immoral that it gets taxed again.

What happens if they don't have the money? huh, they have the money from the inheritance

i would much prefer they targeted foreign owners & landlords more heavily
THIS!!!!
People who treat housing in the U.K. as part of their portfolio! Disgraceful

Inheritance tax is horrid.
The money has been earned and therefore already taxed. To tax it again, simply for being willed to another person is grabbing.

I agree op. I think we should have a much lower threshold for iht. With house prices how they are and uni fees, the only way many can get on the ladder is by having rich parents. We shouldn’t have a society where there is little to no social mobility and how you are born determines your life chances.

Iht is paid by estate on behalf of beneficiaries. There is no reason when so many are paying tax on the income they work for that others are paying nothing on money they are given.

@Crackerscheesescabbyknees - you have no idea if the money has been earned or not and we know for sure it is inearned income of the recipients.

In most cases the large inheritances are due to property price inflation. Not earned at all.

Landlords and foreign owners of property are already taxes too

I've no issue with IHT as it is. I don't think it should be decreased as the threshold is already generous enough to cover most properties.

But just out of interest, if we're talking about taxing more because of house values rising, would the logical way to approach that not to be taxing house sales on the difference between purchase and selling price?

You're missing the point. The income was taxed when earned by the first person. When passed onto their beneficiaries I think it's immoral that it gets taxed again

This is so facile. Money is taxed more than once all the time. Pay income tax, then VAT on vast majority of purchases for example.

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

This. Why should people pay tax twice on the same money ?

We shouldn’t have a society where there is little to no social mobility and how you are born determines your life chances so we’re banning private schools, private medical, first class travel ?
Corbyn is that you?

These kinds of taxes verge on illegitimacy. You’re literally taxing people for dying. But of course there is no good way to tax people. If you use direct taxes you are penalising people for working hard. If you use indirect taxes you disproportionately affect the poor and you also discourage spending. If you focus your taxes on corporate profits you are penalising investors/capitalists who support/run companies providing employment and services.

We shouldn’t have a society where there is little to no social mobility and how you are born determines your life chances so we’re banning private schools, private medical, first class travel ?

Is there really no middle ground?

But the recipient hasn't paid tax on it, that's the point.

@zsazsajuju the appropriate taxes would have already been paid on the value of the estate. Taxes are paid by the estate before the beneficiaries receive the funds so it’s not like the beneficiaries are paying the IHT. If your concern is the difficulty getting on the housing ladder then the tax reform you should champion is removing the CGT exemption for homes. It’s helped distort the housing market.

@OnlyFoolsnMothers and what about their tenants? One persons investment is another persons home where residential property investment is concerned. Tenants are likely to suffer.

I think we should have a much lower threshold for iht. With house prices how they are and uni fees, the only way many can get on the ladder is by having rich parents. We shouldn’t have a society where there is little to no social mobility and how you are born determines your life chances.

If you did that, very few people would bother working long hours in well paying jobs. Why bother trying harder if your kids are never going to be able to benefit from any of your assets after you have gone? You might as well rent, buy loads of holidays (so the money will land in the hands of other countries) and have little enough that the government have to pay for any care that you need. It would really stop people from working hard to get a good education or job.

@TheSmelliestHouse I hate to break it to you but a persons ‘income’ is taxed many many times over. Let’s say you work for a private company and you want to buy a sofa. This is just part of the journey your money makes.

Money in company
Company pays CT
Company pays NIC
Money paid in salary to you - You pay IT
You buy sofa - paying VAT

Obviously it’s likely that the people giving money to your company to pay you have gone through a similar process. It’s also likely that the same will happen when the people working for the sofa company make their purchases. This isn’t taking into account things like council tax, business rates, etc. We all pay far more tax than the PAYE deduction most of us think of when thinking of the taxes we pay. Taxation in modern countries like Britain is designed to be layered up so as to obfuscate true levels of taxation.

Reginabambina well like all tax you have to
look at the levels at which it’s more detrimental, but the idea that less tax means tenants get cheaper rent is farcical.
As for foreign investment- ban altogether like India. However given that most of central London is owned by other nations I don’t hold my breath for this one.

But then why would anyone work hard to save and buy homes to make sure their children and grandchildren can progress and be comfortable bother to work hard?

Everyone would blow their cash before they needed care and the government would have to pay for everyone... the system would crumble.

The argument about money being taxed twice is facile. The majority of money is taxed multiple times. You pay income tax, then pay VAT, fuel duty, excise duty from taxed income. The proceeds of a house which has increased in value never get taxed at all, unless inheritance tax is incurred.

@NailsNeedDoing the estate can delay paying IHT for up to ten years. And the only entity liable to pay is the estate. There are also nil rate bands available where the asset is the family home and is going to be lived in by the beneficiaries.