Inheritance Tax

[Annabella92]

Is it wrong to try and avoid inheritance tax? Is inheritance tax itself unfair? Has your family taken any measures to avoid it?

Her budget proposals will send inflation back up accordingly to the BoE governor.

You have an allowance for IHT each of 325k.
If one of you dies first and their estate is below that then the remaining allowance is transferred to the other. So say you die leaving 300k there's 25k allowance left to transfer so your husband's allowance then becomes 350k
If you both die together the total amount is 650k so it makes no difference.

A solicitor recently did probate for a relative of mine who was widowed almost 30 years ago and he wanted the original marriage certificate in case he needed the allowance transferring over

Except it really isn’t.

The vast majority of the 4% of estates that pay IHT are only in that bracket because of unearned capital gain from house price increases.

On which no tax at all has been paid. **

It's very depressing.

What is?
I'm merely pointing out that you said they'd pay IHT if you died together and this is wrong.

What’s depressing about it? If our kids are unhappy with a share of a £1 million tax free windfall, our parenting has gone badly wrong.

It's depressing that you can't pass everything you worked hard for on to your loved ones.

I’m far from depressed. Ours are getting plenty and they won’t be moaning about it either, they’ll be grateful.

Your pension is supposed to support you in a good life in retirement, not be a tax free way to help your offspring after you die.

Fair point. But people were talking as though there had been massive changes to what they could leave their kids.

Lots of people can because though they have worked hard they haven’t amassed more than a million quid. The narrative that we’d all be rolling in it if we only worked hard enough pisses me right off.
Plus you haven’t worked hard for the property price increase.
Plus a million (or half a million even if you are single) tax free lump sum to your kids, plus most of anything above that after tax is something they should be cheering about, not depressed.

The best way to avoid IHT is to move somewhere that doesn’t have it.
or
Plan well in advance, but that in itself can be tricky especially if you are passing property over.

Or - just let the estate pay it so your descendants get to live in a functional country with good services.

As it’s a persons money they can do what they like with it.
Hence move or take measures to protect it whilst they are alive.

If everyone in the UK had to pay it starting at £1, fair enough.

Actually I think I probably agree we should do as some countries do and start it lower and graduate it.
However I don’t think it’s unreasonable for a person to pay tax on a sudden windfall of over £500k (or £1million if their parents were married).
Edit - and it’s only a proportion of money over the threshold, not all of it.

Haven’t we discussed this on another thread @cardibach 😀

As an aside
Its not a tax on a persons sudden windfall
As the Govn clearly notes it’s a tax on the estate of the person who has died.

We may have discussed it before.
Technically it’s a tax on the estate, yes, but the owner is dead. The people it affects are the beneficiaries so it’s fair to describe it as a tax on their windfall.

Those two things amount to the same thing.

Technically if it’s a tax on the person(s)who are inheriting then it would be classed as income for tax purposes and each individual would be taxed separately on their share.
So it’s not the same.

It wouldn’t have to be. There could be rules about unearned or inherited income. Either way, in practice it’s a tax on the windfall the beneficiaries get because the deceased is…well…deceased.

Labour MP Henry Tufnell’s family conveniently transferred ownership of their farm into a company and set up a trust for his children just 20 days before Labour announced a new 20% inheritance tax on agricultural assets over £1 million. This move could save them 4 million while ordinary farmers face the full force of the tax.
The timing is too perfect to be coincidence. It reeks of insider knowledge and corruption It shows the hypocrisy of Labour politicians who bend the rules for their own gain.

Those farms can do the same. It’s not something g that needed to be done before the law - and in fact didn’t Clarkson say he’d already done it too? Doubt he had advance notice. It’s really not corrupt even if he did know, because anyone can do it at any time. There’s no rule bending here.
And again, it’s only £1 million if it’s a single farmer with no residence on the farm. For most it’s closer to £3 million.

Looks like Rachel Reeves is being investigated as well on tipping off Mr Tufnell.

Tufnells tax avoidance move should be cancelled and he should have to stand down as MP.
What a disgrace

It’s nonsense. It’s not something that needed to be done ahead of the law. The desperation to discredit Labour is really sad to see.