To think scrapping inheritance tax would not be popular with voters

[Lanadelday]

I'd say I can't believe the conservatives are considering it, but nothing surprises me any more that they do. But AIBU to think most people wouldn't back this anyway- I can't see it being a big vote winner and don't think they really get that voters are sick of all the inequality and so many people including kids and elderly, living in poverty, not wanting to make it worse.

He’ll still inherit it. He’ll just have to forfeit a bit of his six figure windfall. Our house is allegedly “worth” five times more than we paid for it - all unearned and untaxed money. If our kids don’t think a tax free, unearned windfall of £250k each is enough we’ve failed very badly in our parenting.

Heck, Blossom, we agree! Keeping 60% of anything over £1m, plus all of the first £1m is hardly punitive.

It’s not the first time. We should maybe be a bit worried about ourselves! 😉

you worry first; I'm married to another tory... and not sure where I live politically right now. Homeless, at best adrift.

Sad to see so many on this thread would support scrapping this tax.

Here is my circumstance: mum lives in a house worth 400 k (give or take the odd k). 4 adult children. Df died 10 years.

Imagining dear old mum kicks the bucket tomorrow:

Either 1) we pay 40% tax over the 325 k threshold (30 k between 4 children - £7500 each), or 2) my dad's half has transfered over to her and we pay £0.

We are adults and have our own lives in different parts of the country/world and the "family home" is a 3-bed semi in a drab suburb of a drab medium-sized city - not a historic country pile.

Therefore, we will probably sell. In situation (1) we'll get about £92,500 each. In situation (2), we'll get £100,000 each.

Honestly, I'll not be complaining about losing £7,500 to tax in situation (1) because I've just got a huge amount of money despite basically sitting on my arse. Also I am nearly 50. If I needed parental help, it was years ago.

And i know for a fact that my mum won't care because 1) she'll be dead (sorry to be blunt, but the dead really can't voice an opinion) and 2) as a former economics teacher and leftie she is very much in favour of taxing "unearned" income.

Where will the money to replace that lost by scrapping this tax come from ?

And if the money isn't replaced. what services will be cut to fund it ?

...and then become wealthy enough to pay £400,000 inheritance tax.

To pay £400k in IHT, you must in the worst circumstances have inherited at leat £600k. You probably aren't the direct descendent of the estate, so it's likely a cousin bounce; ie , your elderly aunt and uncle died without issue and with money, which has arrived with you. Politely, I think you should thank your lucky stars.

This would be such a cynical policy, designed to appeal to older voters who either want to pass on, or are expecting an inheritance. The median age of death is now around 85, so those inheriting are around 60 and already have their own place.

The policy does nothing to address the issues faced by the country, nor the hardship of those in their 20s and 30s who are struggling on low incomes. So cynical.

Where will the money to replace that lost by scrapping this tax come from ?
And if the money isn't replaced. what services will be cut to fund it ?

It won't be pensions. So young people/ taxpayers/ public services as usual presumably.

If this proposal is popular it will be because most people don't properly understand how IHT works in the UK (England, want and NI? See? Who knows?)

• It affects a small proportion of the population.
• The amount collected is much less than expected.
• The dead person is not being taxed - tax is being taken from money their descendents did nothing to earn.
• Most of these descendants will be middle-aged - they will very probably have their own properties. At best the money will be passed onto grandchildren to give them a boost on the property ladder (which is unfair to others obvs).
• The high value of proprties that qualify for IHT is usually because of rocketing home prices, i.e. luck. (I'm ignoring stately homes and the like.)

Then there are much wider considerations about minimising wealth inequality, calming the housing market and collecting tax in a fairer way (is it fairer to tax people on windfalls or for buying clothes or working?)

Personally, i find it freaky people are still trying to exert control after they have gone. Or moaning about having to pay a relatively small sum to keep a house most will never to able to afford to step inside, no matter how hard they work. Sell the bloody thing and keep your lovely free money.

Sadly. Or properly sort out tax for the highest earners. But that would never be a blue rosette policy.

I am a few weeks from my 67th birthday with two live (estranged) parents. I have saved money and constructed pension funds despite being self employed most of my life. I am unlikely to inherit much beyond keepsakes. If I need care in my dotage, I have saved for it. Anything left, I would like most to help my DC get started and settled without fear for the roofs over their head.

@Flammkuchen on the scenario you describe, which I think is pretty spot on for the record, most 65 year olds will cascade money down the generations to help their children secure homes. The children of the baby boom will inherit massively well as a cohort, just perhaps not quite on the timetable they would like.

@EffortlessDesmond I didn’t inherit £600k. I inherited nothing. It was split between 20 beneficiaries and I wasn’t one of them as it wasn’t my relative. This is a man who would wear clothes that were 30 or 40 years old until they fell apart. Saving every single penny he earned meant he had a very large estate.

You are assuming that anyone who leaves an estate does so only because they have a house thats worth a lot because its gone up in value. If we died tomorrow most of our estate would consist of money that we have earned ourselves that has already been heavily taxed. Don't like the idea of it being taxed heavily again. When it comes down to it people will always want to look after their own children.

@MasterBeth he literally spent nothing, that’s why he had a large estate. His clothes had holes in them, his house was falling apart. An ordinary man on a very ordinary income who literally saved every single penny. Had he actually lived the life of a rich person his estate would have been much smaller because he’d have spent a lot of it or he would have tax planned.

Yes I heard that too. I personally think it's an unfair tax because the person has already paid tax on this money when they earned it. IT just taxes it again when a person dies. Most people want to leave their house to their children if they haven't had to sell up to pay care home fees. I think the rich, squeezed middle and poor don't like the hugely unpopular IT.

Where will the money to replace that lost by scrapping this tax come from ?
And if the money isn't replaced. what services will be cut to fund it ?

Let's look at past conservative decisions:

David Cameron proposed changing IHT in 2015 to allow houses of under £1 million to be exempt from IHT. www.telegraph.co.uk/news/politics/david-cameron/11569593/Election-2015-David-Cameron-pledges-5-year-tax-lock.html

At approximately the same time he proposed cutting the independent living fund for disabled people. https://www.telegraph.co.uk/news/general-election-2015/politics-blog/11707492/Camerons-stealth-cut-to-disability-benefits-is-obscene.html

Obviously the IHT give-away cost far more than was taken in by cutting the ILF. But it shows that when the money has to be found, they will be ruthless.

The money will come from the young and the poor of course.

I think you can leave your house to spouse and IT is not applied over certain amount then you can leave some to kids possibly £125 but anything over that is taxed upon death. I know I will be clobbered when I die so DH and I both do gifting to 3 DC whilst we are alive. I gift £1k to each child each year and DH does the same. We can gift £250 per year each to each dgc too. I just wish we could gift more each year. Also IT is reduced if you leave money to charity in your will which we will both do.

I think we're reaching a point where we are starting to think that if you haven't considered how to provide for your own future needs by the time you are 45 or 50, then you need to do so, PDQ.

But it's not through luck it's through wise investment. Others choose to spend their disposable income on holidays and a more extravagant lifestyle. Why should people who scrimp and go without luxuries to invest in their home pay tax again. They will already be paying for their own care fees whilst others get them paid for free.

This is such a shit argument.
For a start, for the most part it is not money that has already been taxed because loads of it comes from the growth in house prices, so untouched by the tax man.
Secondly, loads of stuff is taxed twice. First you get taxed on your earnings, then with that, you pay - council tax, road tax, VAT, insurance premium tax, stamp duty etc.

Is it all just a ploy in the aim of reducing money sloshing round in our economy? Ie another way to try bring inflation down? I know an awful lot of people who benefit from ‘inheritance tax planning’ - there are lots of middle age people being given gifts of money now with the intention of reducing the IHT bill in the future. Scrapping IHT stops that and the money stays unspent in the elderly persons bank for years more.