To think the Uk will move to an iheritocracy

[nappyvalley1992]

In the UK (especially the south east) PAYE earnings seem to increasingly play little part in overall wealth and what matters more of background/family wealth and increasingly the only path to a comfortable middle class life is via inheritance.

I am a late millennial of the south east whose parents own a very average home worth £1 million which under current rules I should inherit tax free. It's a similar story for almost all of my friends (amount almost equivalent of a lottery win). My parents were not even very middle class and had average jobs, they have just got lucky through house price inflation. Its not often spoken about, but I can foresee a wave of very wealthy millennials emerging in the next 15-20 years, and increasingly it wont really matter what someone earns in their day job, the biggest determinant of wealth will be those who are lucky enough to inherit.

Some millennials might even inherit large sums 2 or 3 times via grandparents, and inheriting from parents on both sides of the couple.

Will the government eventually start taxing inheritance more or what will the future look like in this area?

I mean it’s been asked many times already but how is house price inflation “money that’s already been taxed?”

it’s is in fact, free money, unearned, and just the luck of the draw.

The rest of the UK is not like that. Apart from some pockets here and there house prices are not in the millions.

Very London and the South East centric

That's per year...

Stamp duty and mortgage repayments, paid from taxed income.

Then 40% taken on death. It's taxed enough.

Neither of those things are a tax on the unearned increase from house price inflation.

You are usual that you don’t have a sibling or two to share any inheritance with.

Yes care home fees don’t hit everyone, but if they do, it’s horrifically expensive - we’re in the South East and know people who’s parents fees are £12k a month.

for those who do inherit, it does seem to be later than previous generations inherited, which is good as no one wants to lose their parents early.

@Blanketyre

So if her parents downsized next week and bought a cheaper retirement flat, would the OP still get exactly the same IHT break regardless of what the property is worth? Even if the flat was worth 200K and they had 800K in the bank, for example?

I'd assumed that a property's actual value made a difference, but perhaps it doesn't.

Ok, if the right to pass on everyday house to children is to be taxed, the right to pass on estates, farms, businesses etc should also be taxed. Labour have a strange habit of hitting the working people, rather than the rich. Probably because the rich have more options.
Also if you tax pensions being passed on tax free, it must be for final salary pensions, which will often have a widows, or children’s portion on death. Not just people with a money pension fund. obviously that would then hurt MPs, doctors, teachers, civil servants etc

Anyone saying tax the rich only, is really saying tax them, not me. In reality I think the budget will hurt a lot of people, as they will go after easy pickings, rather than fair ones.

This is exactly the case. I have a friend who’s surviving parent went into a care home and the (massive) house was left empty rather than being sold as a means to minimise IHT when they died. Not a good outcome for anyone.

Actually if you look at it in detail it wasn’t that much help anyway, as it f Îm not wrong it only covered the nursing side of things , none of the day to to day costs of a care home. A physically healthy person with Alzheimer’s might not need much nursing care but won’t be able to live alone eventually, it wouldn’t really have helped with costs in that situation anyway.

I haven't read all the thread, but there's a book on this. That's just recently come out and I think we will. It's already happening.

Why not just raise income tax then?

No wages are crap & have stagnated for most for years. Assets have inflated & we have wealth inequality & inter generational inequality.

I’m not sure why the OP has to be a fake?

Inlaws & my parents have estates over the threshold so will have to pay IHT but I think the threshold is generous.

But why would that make the money the property of the state?

If as a family, you never have the option of getting ahead properly, helping your kids or maybe one day a few generations from now getting to a better position in life you essentially have a static ruling class of super wealthy, a bunch of large corporations and then a whole set of us working every day suckers who pay for it all.

@FlowertFlowers you are right. I don’t understand why they didn’t do a % a opposed to a cash amount. Again it means those with less lose more.

Anyone saying tax the rich only, is really saying tax them, not me. In reality I think the budget will hurt a lot of people, as they will go after easy pickings, rather than fair ones.

They have to target the biggest group.

Yep, I'm in the north east from a manual labor background most of my friends parents did not own any property, they where in long term council houses a few that did lost their homes due to economic downturns with the pit closures etc...

Many of my friends inherited little to nothing (also interesting to note mine and most of my friends parents died young).

On DH side though... their parents did make money on property bought for around £5k in the 60-70s, having more office based jobs (teachers, receptionists, civil servants, retail work etc...) they didn't get hit the same career erasures and now sitting on house worth between £75-£130k which is a large rise I suppose.

However when they will inherit (interesting to note almost all of DH friends parents and his own are still alive at much older ages than my sides parents) it then split between two children (£37-£65k) plus fees of selling the house etc... its definitely 'nice' to have that and makes life easier but unlikely to be wildly 'life changing', most likely it will help pay off chunks of their own modest mortgages.

It just sounded good and got people’s hopes up. Yep those with average homes and pensions will often end up leaving next to nothing if they need years of care in a residential home.

A £1million house in the south east is not average.
I agree with your overall premise though. I was not given a penny after I left home at 18. God knows how I would fare today.

And contrary to the usual narrative on MNs even in London you can buy houses for under 1m. The areas aren’t “shitholes” & the houses are still expensive just not 1m expensive.

I think that the labour party have already canned that or at least hinted that it ain't gonna happen.

Just googled.

Properties in South East had an overall average price of £466,543 over the last year.

So a £1 million house is more than double the average house price.

This is true and valid- but the fact remains. If inheritance tax didn’t exist you and your family and everyone like you (aka normal people) would never have got even close to being homeowners

youd still be renting a cottage off the lord and farming his land.

@hollerout a lot of those will be flats surely?

We need to increase inheritance tax.