Inheritance tax in anti-Labour

[iphi48h]

In expectation of the budget it got me thinking - why isnt Labour aiming to tax those who have trusts and are substantial asset rich rather than grandparents who live in London and are cash poor but own their hose. Is it because it's easier or because they dont actually want to tax those who really are asset rich?

Most of my friends whose parents were working class or lower middle class barely have any savings but do have a house in London (we all live in London). Most of my friends whose parents were always middle class have multiple pots of savings, properties and very good accountant - so they will never pay the inheritance tax.

We all live in London and unless you have help from your parents - it's very hard to buy a property. I think a lot of my friends do expect some inheritance from their parents to pass to the grandkids to help them buy a house. But the difference is that those who have always been middle class will be able to do that, those who basically dont have clever accountants and family experience of managing wealth will be taxed. Is that fair? Are we basically taxing people without clever accountants? Why not go for the trusts and clever financial schemes if you want the true middle and upper classes as well as large funds to pay up.

Oh those poor inheritors of millions, how will they cope? The country needs to be funded from somewhere. Inherentance tax makes sense, because the person who had the money no longer needs it. In most cases, it is unlikely to fund their own offspring's first property, possibly grandchildren.

I do think one of the issues with the tax is the rate is so high. Would people find it fairer if is started at a much lower value, but was only 20%? I don't have any figures as to whether that would raise more or less overall.

Personally, I think we need to focus more on taxing those with passive rather than active income. The issue is also not whether millionaires leave but whether their assets remain and those can be taxed.

I am also less interested in wealth per se but whether or not lower middle classes will still be able to buy a home in London and the South East. It is wrong that only millionaires can live here and any developments that further accelerates that is also bad particularly from a Labour government. In that respect it's not whether one person's house should be taxed but whether that one single family house is needed to help four grandkids to get onto the property ladder. At the moment, that is how the system works. What happens if that house is no longer there to be split up?

Whereas conversation used to be around grandkids being richer than the grandparents - we are at a stage where it is much more about how much poorer will those same grandkids be than the previous generation.

I mean London property prices are nuts but you really don't need to be a millionaire to own a house here. We're selling a 3 bed for £650k in zone 3. Most of our friends live in similar sort of houses. We're buying a 4 bed in zone 4. I agree those prices are ridiculous - the 4 bed is a mid terrace with a small garden - but really who needs more than 4 bedrooms? It's £700k.
So yeah it's expensive but all this "millions" that people are talking about are still fancy houses IMO. Even in London.

grandparents who live in London and are cash poor but own their hose

Oh, the poor grandparents, won't someone think of them!

It was reported in Money Week. Yes it happens.

People care about it because high net worth individuals leaving the country harms the economy. And that affects us all.

It's easy to say tax the rich but there are so many implications of this that aren't always thought through. You might not think you care about the FTSE and share performance but you will if your pension loses 50%. Or you can't get a mortgage because banks are under-capitalised because rich people have removed all their cash.

£325k of the nil rate band is cash/investments. You get an extra £175k in your band for property and only if you leave it to direct offspring (Inc GC).

But if you have a property worth £650k that is over your £500k, so yes, you're one of the 4%. I am too, and no offspring so I don't get the extra £175k band.

You do realise that the majority of people in the UK can't afford a house in the South East? You seem concerned only for the grandchildren of people who have benefitted from huge increases in the value of their ex council house because it happened to be in London. What about the grandkids of people in Hull who may also want to buy a home in London? Where is their free £1m? I get it, you don't want to lose a tidy windfall to tax. Fair enough, who does? But if you're going to couch it in terms of concern for the working class, the majority of your target don't live in the SE and will not be losing out on huge sums of inheritance.

@0hshutupshirley but the conversation is about whether or not people in their late 20s would be able to buy in London without an inheritance? A two bed flat is 500k - even 10% is 50k plus stamp duty etc. So you need 70k to buy a two bed flat. Can a couple in their 20s save 70k while renting in London. Yes, if you work in the city, no if you dont.

And actually I dont have skin in the game. As a European I am just mildly horrified by what is happening in London. Where I come from yes we have taxes - but we also have decent health care, childcare, rentals are secure, pensions sufficient. Plus my job is to analyse large scale societal processes. Financialization of the everyday British life whether that in the form of mortgages, pensions, childcare, education and soon to be health and care - has resulted in a situation whereby salaries which have mostly stagnated in the last ten/fifteen years are being spent on many more things than ever before. In the case of housing, my impression that it is being maintained by inheritance or increasingly being bought up by other entities, particularly in London. Increasing inheritance tax without greater involvement in the everyday by the state to prop up the safety net is a disaster.

So you want this inequality to continue where your chance at buying a house is determined by what your parents do or do not have?

IHT is 40%, plenty left for a depost, even in London.