Inheritance tax to be halved

[WildWhippet]

The government intends on having the rate of inheritance tax in the autumn statement.

Is this a good move? Will it encourage you to vote for the Conservative Party?

If you inherit a house worth £2m that your parents bought for £50,000 in 1974, for example, how has that wealth been taxed before?

The double tax thing also ignores the fact that all of our money is taxed multiple times. I earn money and it’s taxed. Then I buy stuff with the remainder and pay VAT. It’s fine. That’s how the economy works.

The only people with a potentially valid complaint against inheritance tax are dead. Anyone benefitting from a will is getting money for nothing, and so moaning about only having 60% of a million pound fortune left is ninja level CF-ery in my view.

sadly however, it may help shore up their core vote which is the best they can hope for now

The vast majority of people I know will never have to pay this, even with homes involved. This is simply allowing well off people to pass on more inheritance to people, who are usually, better off than the majority of people! 'Rich getting richer, poor getting poorer.

This. People will assume they will benefit but they won't unless they were going to inherit a grand estate.

The Conservative Party could hand me a million pounds in an envelope and I wouldn’t vote for them.

Another case of the government robbing the country to pay themselves and their rich friends.

Good move. We are one of the higher IHT country’s in the developed world. 20% would still be high in comparison but is more reasonable. I see lots of threads on here about inheritance helping children and grandchildren get on the ladder or else they would not be able to, and rent forever or long term, so at least the money goes to the family of the people that earned it.

And hard cheese for those whose parents didn't happen to own expensive homes or other assets to pass on. Great. How about using the money to provide more housing for everybody, especially affordable housing, not just an extra boost to those who are probably already in a relatively comfortable position given their parents' assets.

You can make the claim about being "taxed twice" on just about any tax though.

VAT, you have already paid income tax on the money you use to buy stuff with.
Fuel duty, you have already paid income tax on the money used to buy fuel.
Stamp duty etc etc etc.

It's another one of those nonsense statements, a bit like "we paid in all our lives".

If it ends up bringing in more revenue then it makes sense. Otherwise it doesn’t. It is probably people with an estate between 1-5 million paying this tax primarily. Above that and below it does not affect people. Very rich people don’t pay this tax unless there is a very unexpected sudden death- money is given away to charities/clubs, family etc, offshore etc., people go live as tax residents Monaco/Switzerland etc for the health care alone these days.

This is false. Some very wealthy people pay a fair chunk of IHT. Some don't pay any themselves, their trusts pay it instead. Some get away with not paying much if anything because they've been clever.

I see it every week in my line of work.

The agricultural relief is an important one because taxing them often means they need to be split and sold off to pay the tax. This means we lose viable farmland and working farms and discourages farming families from staying on to work then. We need farms, it's important to preserve them as much as possible and if that means a tax break then I'm all for it.

I'd be happy to reduce the IHT (and stamp duty on houses, which is a very silly and distortionary tax - why should you pay more tax just because you move more often?? it unhelpfully discourages mobility) if it was replaced with a wealth tax.

I recently inherited from my aunt along with my sibling and the threshold is lower if you are not a direct descendant. I think about £325k. We paid a huge amount of inheritance tax as she had a house in London and savings. They say oh you don't pay it, the estate does. Not true, you pay it, then you get the inheritance potentially months or years later. So that was fun, we had to get a loan.

Would have no issue paying it if it went to fund the NHS or something useful but I don't trust the government not to waste it all. I would have liked to have a say in how it was spent as it was my aunt's earnings! So if I'd kept more, could have donated more to charities etc.

Nothing would convince me to vote Tory, but otoh I don't feel inheritance tax as it stands is a very fair or good solution.

I’m really torn on this. I have socialist leanings, but my parents’ estate would put us in the 3% (we’re not talking millions upon millions). I see my brother struggle and would like him to inherit the money they’ve worked so hard for, without the hefty tax burden. They are doing what they can to reduce it, but it won’t be 0.

Worse still, my poor Grandad (92) spends so much time and energy worrying about this tax. As a result, he refuses to spend money on care support for my Nan (93) who has Dementia, and struggles through on his own. This also has a significant impact on my parents. He’s only just become wise to his options to reduce the tax burden, and doesn’t have long enough left to implement them. We’ve all told him to spend the money, that we don’t need/want it, but he just wants to pass on as much as he can.

A 50% reduction might just change his mind and improve what’s left of his life substantially.

Is this a good move? Will it encourage you to vote for the Conservative Party?

No. If circumstances stay as they are (which I know they very well may not!), my parents' estate will be subject to inheritance tax. And I'd be happy to see it increased.

Agreed.

Jeremy Hunt could rock up, pay off my mortgage, put 10m in my bank account and shout me a takeaway and a bottle of champagne for tea tonight and it still wouldn't change my voting intentions.

No it certainly does NOT make me want to vote for them! Most people with large estates will already be Tory voters anyway. And most people can understand that the reason that IHT has got unfair in recent years is due to the rapid increase in property prices meaning that more "normal" people in normal houses are drawn into having to consider it. They're not the people it's meant for. It's meant for the very wealthy. The ordinary people drawn into it by the increase in property prices are more likely to have voted Tory if the threshold had been increased so that only the very expensive properties had to even consider IHT. The very rich are already well versed in estate planning and will sort this to their advantage anyway.

In short, it's just a way to keep the very wealthy very wealthy, and make ordinary people a bit worse off. Nothing new there.

Yes, yes. We should definitely tax income and consumption more and unearned gains less. That would be a splendid idea. It will definitely help the lower income and squeezed middle.

No, of course I wouldn't vote for it. Mainly because I am not a greedy twat who thinks it is fine to pay no tax on unearned income whilst public services go to shit.

Well to be fair, passing so much money down to your children to enable the them to afford a bigger deposit may be one of the causes of inflated house prices.

Just paid a huge amount of inheritance tax on my mum's estate. I don't begrudge it. I didn't earn it. Doesn't belong to me. More than happy for others to benefit. And no, I wouldn't vote Tory whatever was on offer.

I’m really torn on this. I have socialist leanings, but my parents’ estate would put us in the 3% (we’re not talking millions upon millions). I see my brother struggle and would like him to inherit the money they’ve worked so hard for, without the hefty tax burden. They are doing what they can to reduce it, but it won’t be 0.

But if they're leaving their money to just you and your brother, then even with IHT you'd both inherit a really significant amount. Hundreds of thousands of pounds.

Which the already wealth will already have. It's the threshold which needed raising to prevent ordinary people from falling into having to organise an accountant maybe for the first time in their lives.

As @DappledOliveGroves says cut Stamp Duty would be popular. The Threshold could be raised on both StampDuty and IHT.
Some of it could be offset by not exempting foreign companies. They escape Stamp Duty on Housing and land business buildings.
End Non Dom status as well.

It's the threshold which needed raising to prevent ordinary people from falling into having to organise an accountant maybe for the first time in their lives.

But they don't have to organise an accountant. They could just pay it, and still pass on hundreds of thousands of pounds. Even with the circumstances a PP posted where someone was able to pass on the minimum amount tax free (as opposed to a person whose circumstances take their threshold up to £1m), it's still a really really significant amount of money, plus a large proportion of the amount over the threshold.
I can't imagine inheriting £300k+ and thinking "but it should be more".