What % of all deaths (uk) resulted in an inheritance tax bill in 2021-22? you're not previewing try and have a guess?

[HecatesBees]

What % of all deaths (uk) resulted in an inheritance tax bill in 2021-22? you're not previewing try and have a guess?

Some 4.39pc of all deaths resulted in an inheritance tax bill in 2021-22 – a total of 27,800, according to official figures.

If your guess was higher, pick YANBU
if your guess was lower pick YABU

(I would have guessed higher, maybe even up to 50%

But you aren’t taxed on it as you are dead!

Yes, they've made money out of it. That doesn't mean it's now yours.

London pay is around 30-40% more than some other parts of the UK, and many who live in the south east, work in London.

Yes, they wait until you are dead to take what you've built up over the years.

Anyway I'm not too bothered. Anyone who can't be arsed to look into mitigation and is happy to give a big chunk of money to the government- knock yourselves out.

You may not be aware that IHT has to be paid before probate is granted. So if most of your parental inheritance comes in the form of a house that has shot up in value, you can’t sell it until you’ve paid the tax. Sometimes you can persuade banks etc to pay HMRC directly and some financial institutions will pay you amounts less than around £20-£30k before probate.

But if you are left a house and little cash, how are you going to pay without borrowing?

my parents’ ordinary semi in sw London resulted in us having to find £81,000 in IHT before we could put it on the market. We scraped it together but it is a LOT of cash to find.

Agree we just did my FIL estate and with his and my MIL allowance we fell just below. Plus it is only over that amount that gets taxed and if ours has fallen above rather than below it would not have bothered me to pay

Okay changing how one pays iht should be looked at -if it's mostly due to a house then make it a charge in the house and give 2 years to sell.

The overall principle of the tax being due doesn't bother me but make the payment of it more practical in difficult circumstances.

You actually keep even more if the estate includes a house being left to direct descendants. (Provided it was a married couple who have passed on their exempt amounts)

Then you can keep an entire £1 million, just paying 40% of £500k, so £200k.

If you end up in a position where you need to pay IHT then you are very fortunate and sitting on a fortune.

Ah, but you didn't though did you? So you have no idea how you would have felt having to find 20k or so before you sold the house.

I agree.

If my parents died tomorrow, my two siblings and I would get £333k each, plus a third of 60% of the rest.

I can't imagine complaining about it tbh.

I don't. Not unless they meet strict definitions of "working farm".

You can also tick the box on the probate form to pay IHt in instalments. Or you can get a loan using the deceased’s estate as security.

You sound awful, greedy and entitled. Talking about the state as if it's some separate entity living it up on our money when in fact it's all of the public services: roads, schools, hospitals, police that make everyone's life better. Boasting about not paying your fair share is a very bad look indeed.

Whatever the ideological view around it, the fact remains that in a house there is a large chunk that has not yet been taxed as its an unearned increase in value due to external factors- some keep arguing this isn't the case but it is and harp on about paying tax twice.

Oh you don’t have to explain yourself re the Daily Mail! NO-ONE on here reads it…except they seem to know everything that’s in it. I read it every morning along with other newspapers, tv news etc on my phone.

I agree. I don’t actually have a huge problem with IHT but the system needs an overhaul. We have lawyers and accountants in our family and still found it complicated. We are probably selling the house at less than probate value so will now have to reclaim iht—more forms. More time spent away from paid work.
more delay.

Agree, that's why I acknowledged it's not always the case (and one of the reasons we don't live in the SE, as DP is public sector where salaries in London are rubbish compared to peers in other comparable industries). But in my industry it's a a LOT more for exactly the same job, so people are being paid more so that they can own a more valuable home.

Not complaining about my lot, BTW - if I wanted a SE wage I would move to the SE! But it's ridiculous for PP to claim that people in the SE are unfairly treated when it comes to IHT - if they are it's because they own a £1m+ house! 🎻

It's not my money, it's my ILs money and they can do what they wish.

If you think I'm going to discourage them from legally avoiding IHT because a random on Mumsnet is sitting at home throwing insults, then you need to get off your phone and go for a walk.

One add on - the ten yearly charge is an IHT charge but it is a different taxing code within the act.

The rate is roughly supposed to correlate with the equivalent 40% rate on death.

"The 4% figure excludes those who are the first of a married couple to die,"

Not always. HMRC figures say that 222,800 estates that applied for probate, 27,800 paid IHT.

Of those 222,800 estates, the deceased person was

married 24%
widowed 54%
divorced/single 22%

Unfortunately, the figures don't say how many of each group actually paid IHT, just the average amounts that were paid.

The figures say that the average married person left an estate worth £473k, a widowed person £450k and a divorced/single person £396k.

A number of married people did pay IHT on their death. I presume that they left assets to people other than their spouse.

The average IHT paid by each group was:

married £7,200
widowed £28,900
divorced/single £44,700

Since the average IHT for those that were married is much lower than widowed but the average value of the estate is similar this would imply that a much smaller number are paying IHT.

This would seem right as likely most people would be passing everything, or most, onto a surviving spouse.

But most isn't everyone.

There certainly are married people who are paying IHT on their death. So, it is likely that the real figure is higher than 4% but how much higher is open to question.

I certainly wouldn't say it was double as, already, there are a large number of divorced/single people included and there are already married people included as well in that 4% figure.

Source: Inheritance Tax liabilities statistics Table 12.4

https://www.gov.uk/government/statistics/inheritance-tax-liabilities-statistics

The percentage will be increasing though won't it, because of the inclusion of pension pots. This will only affect those with private pensions, not the public sector. So, it then becomes a disincentive to save into a pension pot. Again. So having been encouraged to chuck as much money into your pension pot as possible, now the opposite is again true. So stash your money elsewhere, perhaps under the mattress! Or buy gold and keep it in a safe and quietly give it away over time.

@Abra1t @burnoutbabe
Only 10% of the IHT liability on an unsold house has to be paid before probate is granted. The rest (plus interest) falls due in 10 annual instalments or when the house is sold if sooner

I guessed about 2 because I knew it was low.

I don't disagree with you, but many would not want that at all.

Capital Gains Tax was first introduced in 1965 and Private Residence Relief has existed since then because it was considered a bad thing to tax the increase in value of a person's home.

Without Private Residence Relief (for example, if you own a second home) then CGT is currently 18% if you're a basic rate taxpayer or 24% for a higher rate tax payer for residential property.

Assume you are a basic rate tax payer and buy a house worth £200k. A few years later you decide to move and the house is now worth £300k. It has gone up in value by £100k so you have to pay £18k CGT on top of paying stamp duty for your new house.

A few years go by and the house is now worth £400k. You want to move again so you have to pay another £18k in CGT as the house has gone up in value.

A lot of people would not be happy having to pay out all that extra tax every time they moved.