Page 3 | To think inheritance tax policies need reviewing

Passthecheeseboard · 2022-12-04T01:13:44+00:00

So this is inspired by another thread I read tonight, which highlighted the issues of women needing to be married to have their rights protected in a financial way. At first the feminist in me was angry at the suggestion. I believe in my heart you should marry for love not financial reasons. And that a woman shouldn’t have to rely on a man for finances anymore in this way (it’s not the 1950’s anymore ya know 🙄)… I believed if both partners names were on the deeds of the house/mortgage they wouldn’t be subject to inheritance tax. However another poster let me know that this is not the case and that the partners (who’s died) half of the house gets taxed. I just think this is so sad. Imagine losing your partner and then having to sell the house you have so many memories in before you have even had time to progress your grief in order to pay this tax… I can only imagine how sad and traumatic this would be… I can’t help but think this is an issue of discrimination against unmarried women and I actually feel this to be a feminist issue. I just don’t think in this situation the property should be taxed. I understand if you come into an inheritance eg you inherit your parents wealth then it’s acceptable to be taxed. But I think that’s a completely different scenario… Surely as well the property you actually live in should be secure for the surviving partner. More and more people are choosing not marry now, and I don’t think they should feel pressured to if they don’t want to or are not ready to. But they shouldn’t be discriminated against by policies like this. Am I being unreasonable to think this is hugely unfair?

SuperCamp · 05/12/2022 13:48

Xenia · 04/12/2022 20:31

Sweden abolished inheritance tax. That is the route I would take. Only 10% of estates are big enough to pay it anyway so just abolish it.

if we have to keep it then I am not against everyone being treated as I am. Single so only the one tax free bit of £325k and no 500k even if leaving it to my children as the house is in the SE. It is all very unfair. As a single person (never mind if I were living with someone) my children are homeless because of IHT if I die. State steals 40% of most of what I have even though every penny of that has already been taxed at at least 40% because of my earlier divorce etc

Why would your kids not inherit £500k tax free?

I don't blame you for resenting the 40% IHT on anything above the £500k, but will their father not be leaving your Dc his house and share of whatever he walked away with as his share of the divorce settlement? Why will they be homeless?

DancingSpleen · 05/12/2022 13:50

How is this a feminist issue when a man would also have to move out if his partner died?

SueVineer · 05/12/2022 13:58

Testina · 04/12/2022 01:37

From a general policy point of view, I don’t think people should acquire legal financial responsibilities to another adult without explicitly entering into a contract to do so.

So therefore, marriage and civil partnership are desirable pre-requisites.

If a couple want to avoid IHT without getting married, then they can own the home as Joint Tenants. If a woman (as you’re focusing on them) knows that her boyfriend won’t marry her or allow her to be Joint Tenants, then she needs to make other provision for her financial security.

Joint tenants would be liable for iht. I don’t see any justification for the spousal exemption- if people are living with a sister or friend and jointly own a house, why shouldn’t they inherit tax free.

TeenDivided · 05/12/2022 13:58

If people are choosing to not marry, they are choosing not to have the legal benefits that marriage brings.

InTheFutilityRoomEatingBiscuits · 05/12/2022 14:06

I am choosing not to marry and I am a woman. And a woman with children no less.

It is difficult to read endlessly that I would be protected by marriage. I would not. The women around me and in my family have lost out endlessly to the marriage trap. At the point marriage would benefit me, I will consider it.

Why does every second poster say women are protected by marriage? Not a specific woman, not themselves, but a broad stroke, all women, sweeping statement.

MANY women are disadvantaged and bankrupted through marriage and divorce.

SueVineer · 05/12/2022 14:07

Itloggedmeoutagain · 04/12/2022 20:28

If you want the rights of a married person you need to get married or have a civil partnership.
It's not discrimination, it's part of what you sign up for when you get married.
If you want to keep your finances separate and not get married that's fine as long as you don't expect the benefits that go with it

Why should married people have any more rights than anyone else though? Why should two sisters who jointly bought a house together and lived there for 60 years be taxed if married couples are not? It’s nonsensical.

SueVineer · 05/12/2022 14:10

InTheFutilityRoomEatingBiscuits · 05/12/2022 14:06

I am choosing not to marry and I am a woman. And a woman with children no less.

It is difficult to read endlessly that I would be protected by marriage. I would not. The women around me and in my family have lost out endlessly to the marriage trap. At the point marriage would benefit me, I will consider it.

Why does every second poster say women are protected by marriage? Not a specific woman, not themselves, but a broad stroke, all women, sweeping statement.

MANY women are disadvantaged and bankrupted through marriage and divorce.

Yes absolutely. I’m a woman and had far more assets than my ex. Luckily didn’t marry him or it would have left me worse off.

I think there is a group of women of mn who see getting married as how they make their living. Hence all the “protection” stuff

Soontobe60 · 05/12/2022 14:16

ittakes2 · 04/12/2022 02:06

you have not considered adult children living with a parent who dies - they would also have to sell their home due to tax. I think inheritance tax is awful - tax was already paid on the money used to purchase the house.

When I bought my first house you got tax relief on mortgage payments, I paid around £60k in total and became mortgage free several years ago. My house is worth £100k more than it was after I paid my mortgage off. That’s £100k that I have done absolutely nothing at all to earn. No tax paid, nothing. It is, in fact, unearned wealth.

InTheFutilityRoomEatingBiscuits · 05/12/2022 14:19

I would not deny that many women would be better protected if married. I would not deny it’s a good idea to retain your financial independence. I have counselled friends towards marriage for financial reasons, male and female.

But standing up and saying women are protected by marriage is inaccurate and based on huge assumptions, usually that women are weaker financially or have less earning power.

Soontobe60 · 05/12/2022 14:26

SueVineer · 05/12/2022 14:10

Yes absolutely. I’m a woman and had far more assets than my ex. Luckily didn’t marry him or it would have left me worse off.

I think there is a group of women of mn who see getting married as how they make their living. Hence all the “protection” stuff

Show quote history

Up until quite recently, women had no financial protection. We couldn’t get a mortgage, credit card, loans. Husbands couldn’t be charged with spousal rape.
so there was a real need to ensure some financial safety for women. Fortunately things have changed, and marriage isn’t necessary, but a civil partnership is.

VeggieSalsa · 05/12/2022 14:46

As others have said - the problem is actually how you/society view marriage.

It is a legal contract between two people saying they are sharing a life and finances as one household. Nothing more.

You can have love and romance without being married, and many do. If you are willing to enter into a legal agreement with the person you love and romance, then marry them for the legal and financial protection it brings.

Maybe reform is required that allows siblings who live together as one household to have the option of a similar (non romantic) contract, but otherwise the marriage set up and related tax reliefs work very well at the moment, and women have the choice of marriage or cohabitation if they choose not to enter into that legal agreement.

If you REALLY didn’t want to get married, a civil partnership would have the same effect.

VeggieSalsa · 05/12/2022 14:49

Soontobe60 · 05/12/2022 14:26

Up until quite recently, women had no financial protection. We couldn’t get a mortgage, credit card, loans. Husbands couldn’t be charged with spousal rape.
so there was a real need to ensure some financial safety for women. Fortunately things have changed, and marriage isn’t necessary, but a civil partnership is.

Show quote history

I’m by far the higher earner in my relationship. I would NEVER ask my husband, a man who I love, respect and value to impair his earning potential without the protection of marriage. He will be a SAHP when we have children and our marriage means that he has the correct legal and financial protection while in that role.

In my view, if you don’t respect each other enough to take measures that the most vulnerable of you will be protected in future, then should you be in a relationship at all?!

tara66 · 05/12/2022 14:52

If a property is owned by 2 people as 'joint tenants' (and not as 'tenants in common') that means they both own all of it so if one dies the other is still owner of all and no iht paid.

VeggieSalsa · 05/12/2022 14:54

tara66 · 05/12/2022 14:52

If a property is owned by 2 people as 'joint tenants' (and not as 'tenants in common') that means they both own all of it so if one dies the other is still owner of all and no iht paid.

That’s just not true.

Legally you both own it all, but your share of the value would be in your estate for IHT. It doesn’t just disappear because it’s joint tenants, you just can’t leave it to anyone but the joint tenant.

Newlifestartingatlast · 05/12/2022 14:57

Op,
first marriage is only about financial or legal protections. That’s it. It was all it was originally designed for . Although to be fair it was less concerned with giving partners legal rights ( married women had less rights than their single sisters such as all their property passed to their husband) and way more to do with legal legitimacy of children and fathers legal “ownership” and financial obligations wards them
Somewhere in just last 60 years, women particularly seem to have confused marriage with romance and happily ever after.

if you want romance then have a party, declare undying love, but don’t then expect the legal protections you are rejecting marriage to be about.

Secondly, your notion that a women should not rely on a man financially and be financially independent ignores a biological reality. Women give birth. They are ones that take, and need biologically, maternity leave. Her income will stop or drop during that period and the father needs to share that burden- by default she will often be very financially reliant on him during that period. Her income, even if returning to work full time , will be hit by gender pay gap, unconscious bias of the “ motherhood penalty”. If you think that doesn’t exist suggest you do your research. Whist men who have children get the “ fatherhood bonus”. That doesn’t just hit for a few years, it is often never caught back on and affects women into retirement- look at size of pension gap by sex.
many mothers can’t return full time to work as well- sometimes because childcare is too difficult, too expensive or because the child has special needs . And god forbid, too many mothers are still being fired or constructively dismissed during pregnancy - again look at statistics on that

you seem very naive about the realities. And that marriage is a legal contract to give women some security

Testina · 05/12/2022 14:57

@tara66 that’s not true and it’s already been specifically covered if you read the thread.
As @VeggieSalsa just explained, the value of the share you just took over is subject to IHT.

Newlifestartingatlast · 05/12/2022 15:28

InTheFutilityRoomEatingBiscuits · 05/12/2022 14:06

I am choosing not to marry and I am a woman. And a woman with children no less.

It is difficult to read endlessly that I would be protected by marriage. I would not. The women around me and in my family have lost out endlessly to the marriage trap. At the point marriage would benefit me, I will consider it.

Why does every second poster say women are protected by marriage? Not a specific woman, not themselves, but a broad stroke, all women, sweeping statement.

MANY women are disadvantaged and bankrupted through marriage and divorce.

I feel you are being deliberately obtuse here

if you are never going to have children, never want children, and taking actions to prevent yourself from bearing a child ( apologies if you can’t have children as this applies but realise it’s painful), then you are not going to reliant on a father contributing his share to those costs, and supporting you for maternity leave ( this is about him shouldering fair costs of pregnancy too). So, it is obvious you will not benefit on the face of it

but, there are issues it would cause that you need to actively accept and not whinge about

IHT - you may be forced to sell/ remortgage etc if your partner dies and his wealth exceeds IHT limits.
you won’t qualify for bereavement allowance - which is a godsend for many widowed people to help with shock/stress of loosing partner and needing time off work etc
you will need wills to leave assets to each other- whilst married people should do this, intestate laws will default to a spouse. They won’t if not married. It is not unheard of for next of kin to take all assets after death and leave a partner benefit
unless you have LPOA where you’ve named each other as attorneys, you may have no say whatever’s if you partner looses mental capacity. That’ll go to next of kin who may barely know what your partner wants. That includes end of life pathways

id also add, you are failing to see that life has a habit of throwing curved balls. One partof marriage vows is “ sickness and Heath, richer and poorer”. In most long marriages I know, both partners have taken turns at being main breadwinner and the other being reliant on them- through periods of long term sickness, redundancy etc.

this ideal of financial independence for the rest of your life is a nice idea- in reality it can leave people in hardship or destitute, children or no children .

im divorced. But I’m retired. And have 2 grown up DS . Marriage wouldn’t do anything much for me now and I’d be fairly idiotic to enter one- but I don’t even want a relationship anyway. But if you are younger and with a partner , it’s stupid if you want children not to. If you don’t plan to have children, fine, but remember shit does happen, sometimes beyond your control.

SamphiretheTervosaurReturneth · 05/12/2022 15:37

if people want to get married then that’s ok, but if a couple don’t want to or feel ready to marry for whatever reason…

In my days in front of the telly, snotty with cold, snuggled with the dog, I sometimes watch the venerable Judge Judy. I like her explanation of this.

Courts have laws that affect contracts. Marriage is a contract, made to set out the bounds of a relationship in law. Both parties get protections from that contract. Protections a court can rule upon based upon the bounds set out in law. Said contract is set up to save the courts time when dispute occurs.

The law does not have a Not a Contract for people who choose not to avail themselves of the legal contract of the country they live in. So if you don't take whatever contract is offered then you don't get the protections enshrined therein and courts can, and often do, choose, not to waste much time unravelling that which got all mangled.

As for family members, that is a can of worms that would take forever to unravel, unless the whole civil partnership thing is entirely rewritten, to become a legal life partnership thing.

Dragonskin · 05/12/2022 15:47

I can’t help but think this is an issue of discrimination against unmarried women

Oh, is it only unmarried women that get hit with inheritance tax?

InTheFutilityRoomEatingBiscuits · 05/12/2022 16:46

Newlifestartingatlast · 05/12/2022 15:28

I feel you are being deliberately obtuse here

if you are never going to have children, never want children, and taking actions to prevent yourself from bearing a child ( apologies if you can’t have children as this applies but realise it’s painful), then you are not going to reliant on a father contributing his share to those costs, and supporting you for maternity leave ( this is about him shouldering fair costs of pregnancy too). So, it is obvious you will not benefit on the face of it

but, there are issues it would cause that you need to actively accept and not whinge about

IHT - you may be forced to sell/ remortgage etc if your partner dies and his wealth exceeds IHT limits.
you won’t qualify for bereavement allowance - which is a godsend for many widowed people to help with shock/stress of loosing partner and needing time off work etc
you will need wills to leave assets to each other- whilst married people should do this, intestate laws will default to a spouse. They won’t if not married. It is not unheard of for next of kin to take all assets after death and leave a partner benefit
unless you have LPOA where you’ve named each other as attorneys, you may have no say whatever’s if you partner looses mental capacity. That’ll go to next of kin who may barely know what your partner wants. That includes end of life pathways

id also add, you are failing to see that life has a habit of throwing curved balls. One partof marriage vows is “ sickness and Heath, richer and poorer”. In most long marriages I know, both partners have taken turns at being main breadwinner and the other being reliant on them- through periods of long term sickness, redundancy etc.

this ideal of financial independence for the rest of your life is a nice idea- in reality it can leave people in hardship or destitute, children or no children .

im divorced. But I’m retired. And have 2 grown up DS . Marriage wouldn’t do anything much for me now and I’d be fairly idiotic to enter one- but I don’t even want a relationship anyway. But if you are younger and with a partner , it’s stupid if you want children not to. If you don’t plan to have children, fine, but remember shit does happen, sometimes beyond your control.

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@Newlifestartingatlast

I am a woman with children - it might not have been clear but that’s what I meant by “I am a woman. And a woman with children no less”.

I have 3DC. And a long term partner - 24 years. I understand the curveballs. We’ve been through long term illnesses, multiple bereavements, losing babies, redundancies, mental illnesses, long term unemployment, debts, all the usual things that crop up in long term relationships. He has wanted marriage for decades, but I do not want it.

We have all our loose ends tied up with shared wills, executors, POAs, inheritances, next of kin. I did not enter into a shared financial life with another adult blindly, I appreciate many do.

I did not take maternity leaves that required high levels of financing, just a week or two in each case which were easily saved for (jointly). I will not ever choose to be financially reliant on another person and have saved and arranged my whole life so that does not happen, fingers crossed it never will.

My female relatives married and spent years, in one case decades, fighting through courts in divorces which drained them of their life’s earnings in fees and settlements. That can’t happen to me.

Original poster

Passthecheeseboard · 05/12/2022 17:13

SueVineer · 05/12/2022 14:10

Yes absolutely. I’m a woman and had far more assets than my ex. Luckily didn’t marry him or it would have left me worse off.

I think there is a group of women of mn who see getting married as how they make their living. Hence all the “protection” stuff

Show quote history

This is a really good point. Women have careers now and possibly earn more than their husband, I think the viewpoint on marriage protecting women is based on women who earn less or are housewives. A large number of women will be earning the same amount or more than their partners. They probably have their reasons for opting out of marriage and could end up financially worse off if their marriage breaks down and ends in divorce ( and let’s be honest most marriages do end in divorce).

And as for the sisters who own the house together and who have lived together for decades, why should they not receive the same tax benefits as a married couple regard inheritance tax. It doesn’t make any sense when you think about it and seems unfair.

OP posts:

Original poster

Passthecheeseboard · 05/12/2022 17:14

SueVineer · 05/12/2022 14:07

Why should married people have any more rights than anyone else though? Why should two sisters who jointly bought a house together and lived there for 60 years be taxed if married couples are not? It’s nonsensical.

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This 👏

OP posts:

Xenia · 05/12/2022 17:22

SuperCamp, my children won't get the 500,00 tax free band for a house inherited by a single person because it is not available to those with a house over a certain value. So my nil rate band is £325,000 only. You mention their father - yes he may choose to leave something to the 5 children (and to his second wife of course), but he will die probably a lot later than I do so if I die they are not helped at that point to stay in their home and as they are over 18 they have no entitlement to any financial assistance from him. I am not pleading for people to be sorry for us as at least I own a mortgaged house, but I just wanted people to realise that single women with a home leaving it to children in some cases only have £325k IHT free, whereas a married couple can be up to £1m.