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.

I’m from a free school meals family. I got my first weekend job at 13, had a year maternity leave at 45 but otherwise have worked non-stop. I’m now 56 and will work another 11 years full time and pay 50 years tax.
I haven’t had new cars or expensive holidays. I bought a nice house instead, which has gone up in value.
Assuming I don’t need 10 years in a care home, my one ds will inherit a chunk of money. I would have liked more children but I didn’t because I wanted to be able to give him a decent start, not scraping by like I had to.
Anyone could have made the same choices. If they haven’t, that doesn’t give them the right to help themselves.

We do pay for it. The key is in how much the Government assign to it, and how that money is spent and managed, and how the public uses it, no? I agree that the claps are pathetic. But the current situation is a whole other subject.

@mintjulia I can empathise and agree with you. Similar here.

Absolutely. As long as there are people struggling with having enough food and decent shelter, as long as there are overworked underpaid nurses with inadequate PPE, as long as we can't afford decent education and free school meals for all children - every inherited penny should be taxed heavily and all possible loopholes closed.

It doesn't matter how much tax your parents paid - money is taxed when it changes hands. Your parents worked hard not only to ensure your comfort but for the good of everyone. No man is an island, our happiness and health depends on other people's happiness and health. This epidemic is a poignant point in case.

How about capital gains on homes - that would generate far more income than IHT. Crazy that someone can make tens or hundreds of thousands of pounds when they sell their home but pay no tax on that unearned gain.

How about capital gains on homes - that would generate far more income than IHT. Crazy that someone can make tens or hundreds of thousands of pounds when they sell their home but pay no tax on that unearned gain

This would need to be thought about in the context of stamp duty too. If someone sells for a big profit and then goes on to buy a house to live in they pay stamp duty, which would have increased hugely due to stamp duty (so kind of paid forward tax on the sale).

I’ve read an idea about stamp duty on sale rather than purchase (your idea really). Not though about it in great detail, but on the face of it is attractive.

I don’t see it as necessarily an either/or though

Sorry, error in previous post. Stamp duty for the new house would have increased hugely due to house price increase.

Are people going to stand to enherit much if the house bubble bursts?

Those people passing on their wealth are making sure the state never has to look after them . That has its advantages?
The people leaving £1 m to family aren’t the big money families we should be tackling .

We are all going to have to pay more post covid19.

I think tax across the board for everyone is going to have to increase to pay for this pandemic which I think it right. It's the picking on one particular thing that I object to which often boils down to simply a judgement about if you won't benefit from it then no one else should.

Most people have inheritance to pass on because they were sensible and saved. By increasing tax you are encouraging people NOT to save, squander their money therefore increasing the social care bill for elderly care.

I've benefited from inheritance but think the above is nonsense.

I’m normally fairly left leaning (unlike the rest of my family) but even I draw the line at this. Why should my father, having grown up in poverty and worked his backside off to save every penny he could for his children’s’ future, have that taxed so heavily?

He often tells us that he feels that his biggest achievement in life is being able to leave his children and grandchildren significant amounts of money, and he gets so angry at the idea of that being taxed through the roof. Luckily he’s financially savvy enough to mitigate this through careful planning, but people like my in laws were horrified to learn, when they visited a solicitor to discuss their wills, that their hard earned savings could be subject to taxation.

I think tax across the board for everyone is going to have to increase to pay for this pandemic which I think it right. It's the picking on one particular thing that I object to which often boils down to simply a judgement about if you won't benefit from it then no one else should

Agree that it needs to be paid for, big time! To me this IHT is a part of what will need to/should probably be done, and not just in response to the virus. It’s also in response to increasingly, income from assets rather than work increasing. I don’t think people talking about reforming IHT tax precludes them thinking other measures should also be taken. But starting a thread on all things at once would be a bit much. Plus it is an interesting one because it is as the cross roads at a lot of interesting policy areas/ways that humans think.

To your point about self interest, in the main I see people against it defending their own self interest. I haven’t seen anyone defending changes saying either way whether they will benefit or not. I expect it will be a mixture.

Many of my friends are due to inherit large amounts - some still think it should be reformed. Some have works much less hard because they expect an inheritance to be their future (risky!)

No one who is hoping for an inheritance or who wants to pass on their property to their children will agree to hand over a higher percentage of it without a fight.

Yes ,life is unfair and some people are more unlucky than other but if you pull back the layers , the lack of luck is usually ( not always ) a result of some really crap decisions when they were younger.
You are not entitled to other people’s money. If you want something you need to be prepared to work for it .

You are not entitled to other people’s money. If you want something you need to be prepared to work for it

I’m confused as to whether this is a defence of reducing thresholds or not? It really could be taken either way! The person has died. They are not here to be taxed.

We raise taxes in all kinds of ways (including on people who work for that money via income tax) so they state is entitled to take peoples’ money. I see this is a policy debate about where that tax should come from.

Sorry - should have said the state is entitled to take people’s’ money in some circumstances!

How about capital gains on homes - that would generate far more income than IHT. Crazy that someone can make tens or hundreds of thousands of pounds when they sell their home but pay no tax on that unearned gain

You need that money to move house. The housing market would grind to a halt if it was taxed.

I think one of the biggest issues you would have if you increased inheritance tax significantly is that there is a sizeable section of the population which relies on an inheritance in order to buy a house. For many, unless they inherit they will not be able to save enough to get onto the property ladder.

If you halved, or took away entirely, that inheritance, then there will be more people renting. If fewer people can afford to buy then there could be a depression in the housing market, leading to lots of people in negative equity and the expansion of BTL landlord empires (those that can afford to buy properties).

The high number of renters who can't afford a property now, combined with high rents in this country is already a ticking time bomb, given that at some point they will all have to retire and try to afford to pay their rent for the next 20 or 30 years of their lives with whatever pension they have managed to save, plus the state pension (if that is still around in 30 or 40 years time). There is a good chance this is going to end up costing the government an awful lot of money in the future in one way or another, since you can't have tens of thousands of pensioners out on the streets.

I don't think it's a simple as saying "it's unfair, noone should have any inheritance". Taking something like that away has far-reaching economic implications which the government will need to think through carefully. Knee-jerk reactions are rarely healthy.

Dear God, I'm not surprised you don't want to watch fortnite. I suppose if you learnt to play it may be slightly less tedious. Could you make a cake for them while they play, or paint their rooms, so they still benefit? then tell your DH to come and watch the paint dry and see how he feels

^^ erm, possibly.wrong thread sorry.

Yes ,life is unfair and some people are more unlucky than other but if you pull back the layers , the lack of luck is usually ( not always ) a result of some really crap decisions when they were younger.

That's BS, I got on the ladder young because I grew up in London & had parents who could help. Getting on the ladder young means I have a ton of equity plus Ive saved on childcare costs having family close by & willing. Some of my friends who have great jobs & have worked just as hard or even harder then me but couldn't live rent free & took yrs to save a deposit & then paid 5X as much as me for a similar property haven't made bad decisions. 🙄

Tax is already paid on the money by the people who earns and saved for their children. Only those that inherited nothing want astronomical levels of inheritance tax. It’s just envy.

You are not entitled to other people’s family money that should have said .
Mocho - what’s your point ? Your friends still have jobs and have bought houses . Are you saying that they should then hand it over to someone else because they don’t have anything ?
Human nature is to look after your own . Always has been and always will .

Most people with some kind of sob story or bad luck story will have made a few bad decisions along the way . Those who have made a good life for themselves will have made a few sacrifices .
Of course some are just lucky / unlucky sods but I imagine that’s rarer that you think . You made your own luck .