To think inheritance tax should pay for social care

[Wouldloveanother]

Just that really. Saw somebody else mention it on here and I think it’s a brilliant idea!

I find it incredible that older people who can afford it should be expected to give up their home (which they have likely lived in for most of their life) just because someone younger might need it!

If they need to do that to pay for their care, why not? If I was made redundant the bank would likely repossess my house, the fact I have small children would mean nothing to them. Why are houses only seen as emotional and sacred when it’s the elderly?

You've massively misunderstood what I meant when I wrote "how/where you come into this world" - we can't choose our parents or our birth circumstances, I'm making reference to posters who seem to despise the privilege of others, it's a lottery at birth.
It'd be a pretty strange idea to suggest there's no freedom of movement which seems to be your interpretation of that statement.

Nobody should pay inheritance tax. It's legalised theft. Taxing something that has already been taxed?

You must fucking hate VAT. Far more VAT is levied on previously taxed income than IHT, a large proportion of which is on unearned above-inflation increases in property values.

And the people it impacts are those who are left behind.

Who haven't worked for this windfall, and will still inherit?

With a private /Direct contribution pension, like an employers scheme with no special conditions or a SIPP, you can leave it to whoever you like, whether it’s in drawdown or not. Your Mum should have you down as beneficiaries within her pension account, if it’s been turned into an annuity however, it dies with her.
It’s only DB schemes, where there is no actual pot of money, just a promise to pay x amount per year, that normally have spouse only payments, usually at 50% - my DH gets a military pension at 60, if he dies then I would get half, for life.

Honestly, can anyone explain why IHT is reprehensible/legalised theft/whatever because it's a tax on previously taxed income (despite us all knowing that a large part of most estates is a windfall from property price rises, and despite the person who paid the tax being dead and not affected in any way by the taxation, it's the recipients who haven't earned it who are affected) - but they don't see VAT, CGT on shares, stamp duty, whatever as the same principle?

(And in the case of VAT massively more regressive in terms of who pays.)

I'm making reference to posters who seem to despise the privilege of others

I don't think people who think inheritance should be changed & taxes more despise others. I think a fairer more equal society is better for me even though changes to IHT would impact me.

@JassyRadlett they worked harder for it? 🤔

I was really surprised the gov didn't target VAT but I guess as that helps the poorer it was off the table.

Do you believe in any tax? All of it comes from something somebody has ‘earned’.

I believe that all tax should (in theory) be avoidable and only paid 'knowingly'. Although, in practice, you will end up paying a lot of tax, it's because of life choices that you've made - often very good, worthy, wise choices (or realistically Hobson's choice), but still ones that you could have avoided if you'd wanted to.

Deliberately earn only within your personal allowance to avoid income tax; buy only very basic, spartan goods that aren't VAT-able (easier said than done, I know) - or even grow your own food/make your own clothes; don't run a car; don't buy any insurances etc.

These are all things that, if you were to do them, the taxman wouldn't have a say in, but if you own a house over the IHT threshold (difficult to end up doing if you've made some of the abovementioned choices, I realise), the taxman WILL force you (your estate) to pay tax by default, unless you deliberately retrospectively make arrangements to thwart them.

I think IHT is inherently a thoroughly ageist set-up. Many people in care homes are, at least partially, subject to medical health problems, rather than just general/personal care needs.

If a 10, 20, 30, 40-year-old person had the same needs, there would be no question that the NHS wouldn't pay for them, with nobody sniffing around to see what property could be taken from them or their parents to pay for it; but just because elderly people will often own their own home outright, and their death is likely not to be too far into the future, they're seen as ripe for the plucking.

Even if they are only general individual/dependence needs and non-medical - so we adjudge them out of the remit of the NHS - how is that different from the NHS covering all of the costs of a 'textbook' birth, where there are no active medical concerns other than what could potentially befall the mother and/or baby - just like numerous medical problems are considerably more likely to befall the elderly? Should the government be looking to put a charge on the expensive house of wealthy parents in order to pay for what are normal and anticipable 'beginning of life' costs? What if that same wealthy family go on to have 10 straightforward NHS births - why shouldn't they pay for what is mostly non-medical-need and very much predictable costs? Where are the people demanding to know 'why should I have to pay for other people to have more children than I could ever afford to look after?' and thus demanding they be personally taxed for their own families' needs in that respect? But flip it to the other end of life, and it's 'only' the old folk, so we don't want the burden of their needs.

I also think it's disingenuous to say that it's different because it's taking assets from a dead person who no longer needs them. Those of us with children - or those without who are also community/philanthropically-minded - don't make choices in a vacuum. We choose to leave legacies to the younger generations, often making great personal sacrifices whilst we are alive in order to do so. A deceased person's assets aren't just 'random' money that's dropped out of from nowhere - they are the proceeds of their life's work (and, yes, sometimes luck or being in the right place at the right time).

Meanwhile, lottery jackpot winners aren't taxed on their multi-millions, because they already paid 40p or whatever tax when they bought their ticket, so it's considered inherently unfair to tax them 'again'. But when you've paid lots of income tax (often off the back of hard work and sacrifice) and VAT in getting yourself comfortable and amassing a few valuable assets, it somehow is fair to tax you again on it.

For the record, I'm not wealthy and none of my family have ever been (or likely will be) anywhere near the IHT threshold, but I think the whole system is grossly unfair and discriminatory in a huge number of cases. Maybe somebody should campaign against it and take the case right up the top, to the King, as surely he will understand fairness....

Your argument founded on non-evidence assumptions.

I didn't state there was "no freedom of movement", I stated the opposite by pointing out that people may relocate. As they have always been able to do. In France, for instance, the minimum required monthly income for a VLS -TS (inactive) visa is 1330 euros per month. For a couple.

I haven't "massively misunderstood what [you] meant when you wrote "how/where you come into this world" - I disagreed with it and your dismissive comment about "crying over your cornflakes".

I disagreed with it because as I pointed out, the UK is extremely unusual in European terms in having extremely high house prices, relatively high taxation on middle earners and very low inheritance tax.

I made no reference at all to "the privilege of others" which you keep talking about. My interest is in making hard work more worthwhile for the majority rather than chance of birth for a smaller minority.

Are you deliberately misunderstanding what I said or do you really struggle with understanding basic discussion which diverts in opinion from your own?

Making up what you would like someone to have said so as to discredit them really isn't going to cause people to warm to you.

If a 10, 20, 30, 40-year-old person had the same needs, there would be no question that the NHS wouldn't pay for them, with nobody sniffing around to see what property could be taken from them or their parents to pay for it; but just because elderly people will often own their own home outright, and their death is likely not to be too far into the future, they're seen as ripe for the plucking.

But surely that ignores the fact we have an ageing population & most people haven't paid in anywhere near enough.

A 30 yr old today will face a much later pension age if they see it & it's unlikely the NHS will exist in its current form when they are old. Free prescriptions over 60 definitely won't.

We choose to leave legacies to the younger generations, often making great personal sacrifices whilst we are alive in order to do so

But how does it help wider society & don't you think it encourages more inequality?

I believe that all tax should (in theory) be avoidable and only paid 'knowingly'. Although, in practice, you will end up paying a lot of tax, it's because of life choices that you've made - often very good, worthy, wise choices (or realistically Hobson's choice), but still ones that you could have avoided if you'd wanted to.

IHT is a damn sight more avoidable than VAT or even income tax - you can choose not to own property, you can give sums from your savings that are above the threshold to charity, etc etc. A damn sight more feasible than never buying shoes.

Now, these choices don't add to your security and well-being, so most people do choose to own property, etc, even though it may be taxed after your death.

But arguing against IHT on the basis that it's less avoidable than income tax or VAT is frankly ludicrous. Avoiding IHT is a damn sight more comfortable and achievable than avoiding either of the other two.

I think the legacies left to younger people aren’t meant to help wider society.
Why would they?

People want to give what they have to their own, and especially if they’ve made sacrifices to get it. It’s natural to want to help your own our first.

Like I said upthread I think a fairer, more equal society would benefit my dc. My dc attend excellent schools, they have good prospects & most importantly a safety net. They don't actually need millions, they will be fine.

People want to give what they have to their own, and especially if they’ve made sacrifices to get it. It’s natural to want to help your own our first.

Though the exact same arguments apply to VAT, income tax, CGT... the only difference that IHT only directly affects people who haven't earned the money, and the other taxes affect people in a much more regressive way.

Why is IHT special? The only reason I can think of is 'I don't want to share my privilege.'

I’ve always believed IHT should be hypothecated (ring-fenced) as a tax to fund social care - even if it doesn’t cover the full cost. It’s always seemed like a no brainer to me - then everyone who has assets pools the risk of long term ill-health such as dementia instead of it falling disproportionately on individual families - it’s not as if the individuals need their assets anymore because they are dead.

And it is ludicrous and pure political expediency to regard dementia care as somehow ‘social’ as opposed to medical care. This is just a funding device to avoid general taxation being used to fund care for this fatal disease because of the costs involved. Dementia is not simply a function of getting old. Fewer than one in five will need long term dementia care.

In some ways it would be better to stop taxing the estates and shift the tax to the recipients, who would then pay tax on it as either a capital gain or income. Capital gains, for choice

Agree with this 100%. A think tank headed by David willets suggested just this - a lifetime allowance , then taxed as if income. Which it is really, it’s just that the recipient has done nothing to earn it.

Tax AVOIDANCE is totally legal and above board. People earning very modest incomes employ it when they claim their Personal Allowance against basic PAYE taxation. The Govt ENCOURAGES legal tax exemptions/ avoidance

I think you have this wrong. Evasion = illegal. Avoidance = co-opting a mechanism intended for a different purpose to reduce tax. Planning = taking advantage of schemes in the way they were designed to be used eg ISA

Because the value of that house has been inflated massively due to house price rises and that’s unearned, untaxed income.

That's not the fault of the person who bought it though... so why penalise them or their family.

I didn't realise we were purchasing homes now hoping they decreased in value.

i know someone who bought a house for £20k, lived in it for 50 years and sold it for £1.5m. This money is totally and utterly tax free. Have they earned that money? No.

this country needs to raise taxes. Is it fairer to up income tax, or to find some means of taxing Mr £1.5m? Yes, a capital gains tax on property while scrapping stamp duty would be fairer, but if that £1.5m is caught by inheritance tax that’s also fair. House prices increases are not earned money, and so are not taxed.

High house prices are so bad for this country:

takes up so much salary people don’t want to pay income taxes (our basic rate tax is low compared to other European counties, but our average house price is much higher)

People are put off having families until later on in life due to saving for a house / have smaller families due to not being able to afford as big a house as they’d like.

Those with bank of mum and dad are much more likely to get on the housing ladder, ingraining inequalities.

Breeds inter generational resentment.

A relative had all of the money she had saved in her life used up on her healthcare in her last years. She wanted to leave something for her children and worked accordingly. She invested in her home over the years and it accumulated in value but was sold to pay for her care. She was in a nursing homeand the people in the room adjacent to her never worked a day in their lives and not because they couldnt either. I'm all for a caring society but this seems very unfair. Btw I wasnt one of ber children.

The 'good' news is that the way things are going few of us will be able to afford to buy a house never mind run it, so another generation or so and the inheritance thing will be redundant.

Still wondering where all the money for healthcare from Brexit has gone and interested to know if anything was ever done about taxing the Amazons Costas Starbucks of this world proportionately , or is it the minions who are just liable to tax ?

@WeBuiltThisBuffetOnSausageRoll

This isn’t true If a 10, 20, 30, 40-year-old person had the same needs, there would be no question that the NHS wouldn't pay for them, with nobody sniffing around to see what property could be taken from them or their parents to pay for it; but just because elderly people will often own their own home outright, and their death is likely not to be too far into the future, they're seen as ripe for the plucking.

younger people with social care needs do pay for their care. The assessment deciding whether NHS or they pay/contribute to their care is exactly the same as the one used for elderly people.

No, the majority of old people don't need social care so why should they pay for something they don't use. Better for something to run alongside workplace pensions to provide a fund for each person's social care & if they don't use it then it is passed to their estate after they die. My aunt is in a care home due to dementia, my uncle has recently died & my cousin can't sell their house due to red tape about the care home getting their money, my aunt & uncle were tenants in common. In the meantime my cousin is having to pay council tax as it is over 6 months since the house became empty & the energy bills as they can't be finalised until the day the house is sold, I don't know how she is affording to pay them. Why should dementia be any different to someone who has cancer & qualifies for continuing health care & gets all their care paid for?