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.

Ahh yes all those people who worked so very hard for double digit house price inflation pumped up further by deliberate government policies choices! I am in awe at these Stakhanvites.

I would tax inheritance as income (with a carve out for people inheriting all or part of their principal residence). Why should I be taxed for the income I earn through sellign my labour but someone can on their arse doing nothing and gain hundreds of thousand tax free because some relative died. It's madness.

Well, there will of course be people in favor of this policy that still wont vote Tory, but it’s not like they’d necessarily need to anyway. With a bit of planning it’s not exactly difficult to avoid paying it.

We were discussing this at the weekend. I think it would be a popular move and a definite vote winner.

We are in our early 50s and our friendship group have mostly elderly parents with estates worth well over the threshold. We live in the SE, this is not uncommon as property prices are so inflated. We are not talking about rich and privileged people. These are people that worked their whole lives, saved to be able to buy a property and saved to have money to leave their children.

We are in our early 50s and our friendship group have mostly elderly parents with estates worth well over the threshold. We live in the SE, this is not uncommon as property prices are so inflated. We are not talking about rich and privileged people. These are people that worked their whole lives, saved to be able to buy a property and saved to have money to leave their children.

The thresholds are quite high though. And property wealth from huge price hikes is unearned. Sounds like you're 'alright jack' What about people using food banks, millions of kids living in poverty.

It's not just that.

It's the fact that people who actually earn money are becoming increasingly penalised at the expense of people who speculate. Speculation doesn't generate wealth in a country, as people who are long on property are about to find out.

Wealth can only be generated by the productive. Productivity should be encouraged, speculation taxed, especially when it is on assets that people need to live, like houses. House prices should go up no more that general inflation levels.

We should be increasing CGT and inheritance tax and decreasing income tax to incentivise people to work, not doing it the other way round.

If we don't start doing this soon then there are going to be some pretty serious consequences - namely the country is going to have to start slashing public expenditure. But my guess is the older cohort are so greedy they are going to continue to vote to the benefit of themselves and the only thing that is going to rectify the situation in the end is economic collapse.

Good. Scrap it.
When I die I want as much to go to my children as possible.

@GasPanic exactly that. As discussed here before the biggest disincentive to aspiration isn't IHT but the fiscal drag that comes from not raising the 40% threshold. People aspiring to fairly modest middle manangement jobs are being dragged in to the 40% tax bracket.

All those in favour of scapping IHT - who should be pay tax to keep the NHS and pensions going for an aging population? The working population can't really should much more income tax.

Ok it doesn't all but 40% over the threshold. So I will definitely be attempting to spend or give away to family any over that before I go (hopefully at least 7 years before, for full taper relief).

Inheritance tax brings the government £7 billion a year approximately.
obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/inheritance-tax/

In reality that is small change (NHS costs £180 billion a year for example) so it really makes little difference for the government to scrap it with regards to income streams and I expect would be popular with a significant proportion of voters.

I disagree with the principal of inheritance tax.

Inheritance tax unfortunately IS one of those taxes that is a punishment for doing the right thing and prioritising paying off a mortgage (no doubt making lots of sacrifices along the way to do so) so that you have a place to live in your old age - and/or a place to sell to fund your old age, if you need to.

The fact that there are super wealthy people in the world has nothing to do with the principal of inheritance tax.

Forgetting thresholds for the moment, to keep it simple...I think it is fair to pay a capital gains tax less what you have paid - as this the genuine benefit to you.

Example:
You buy a house for £200 000.00. You pay it off, plus interest, over 20 years at 5% interest, so in total it costs you £316 000 in after tax payments.

Over 20 years house prices increased by 200%, so your house is now worth £600 000.

Your capital gain is £400 000. But offset against how much you have paid for the house (with money you have already paid tax on), your total gain is actually £84 000

£84000 is what your beneficiaries should pay tax on, not 40% of the total size of your £600 000.00 estate, which is £240 000.

Mind you most of the properly rich tories and their friends have enough money to manoeuvre out of paying a lot of IT. It’s anyone with their fortune tied up in 3 bed semi in the south east who pays what they owe. The wealthy can afford to pass on their wealth during their lifetime (paying school fees for grandchildren etc) and afford to get around it in other ways (buying agricultural land for example). I don’t agree with abandoning IT and I don’t think it will ever happen but it’s going to be popular with lots of people.

Id be very pleased and continuing my aim never to pay income tax and IHT ever again 👍🏼

If they have an estate valued above £1m (the effective threshold for a couple leaving a house) then they are rich and privileged.

It's a matter of principle.

It's not fair to tax money that tax has already been paid on.

I think it should go. I'd vote for a party who said they would scrap it.

You seem to think that you stop paying tax when you stop working. I'm retired I still pay tax. My father at 93 was still paying tax and nearly £5,000 a month in care home fees.

I know retired people pay tax - but they don't pay NI.

You don't need a lot of money to avoid IHT. You just have to be willing to pay the legal fees to structure your affairs in the correct way.

The benefit of paying say 5k fees to someone with a £2 million estate might be less than someone paying the same on a £10 million estate as a % of tax saved.

But the bottom line is both can do it and in the context of the amount of tax saved it is a fairly trivial sum.

According to analysts only 10,000 families a year actually pay any IH. I had to pay it on my uncles bequest, but many use accountants/solicitors to avoid it.

If that's right, it will affect very few people. A lot more people are aggravated about care home/care packages that eat into savings and assets very quickly.

Bit of a non event. 🙄

Out of interest, what do you think the threshold is?

To be honest, much as J can't stand the lot of them, I think if they really do ban inheritance tax it will be a game-changer and they will win the election. Especially as Labour are so so wish-washy.

Then problem is with "giving it away" is that it can be classed as "deprivation of assets" if care (at home or in a home), is needed.

Councils are chasing these cases up through the courts.🙁

@milkandbread you wouldn’t pay 40% on £600,000 as the tax kicks in above the £325,000 threshold. If someone dies and their estate is left to their spouse in a simple transfer of the estate then there is no tax at that point and I believe (though I might be wrong) that when the second spouse dies a second band of £175,000 if everything is being left to descendants.

Of course they're rich and privileged if they have assets worth well over the threshold! I say that as someone with a parent in that bracket, he hasn't worked for 40 years, just sitting on a pile of investments and a very nicely appreciating property. I will maybe inherit some of it one day, although much will go in care home fees before then - which, btw, I think he quite rightly has to pay out of his savings. How you think that isn't rich and privileged is beyond me.

Inheritance tax unfortunately IS one of those taxes that is a punishment for doing the right thing and prioritising paying off a mortgage

people who rent are also 'doing the right thing' Often propping up greedy landlords

This already happens. You pay both income tax and NIC on your salary, for example. A double tax.

You might then pay VAT or fuel duty on goods you purchase using that taxed income. So that income is taxed again.