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?

So much misinformation on IHT. If you're lucky enough to be left an amount of money where IHT is due then you really don't have anything to worry about financially, much less paying a bit of a tax which would hopefully go towards struggling services etc.

So much misinformation on the farms too. If a farmer sat down and did the sums h’d realise James Dyson and Jeremy Clarkson are deliberately whipping them up into a frenzy simply because their IHT avoidance scam no longer works, as a result agricultural land values will plummet and they’ll loose their investment too. They are cross but the average farmer has no need to be.

The challenge with farms is that the super rich have been buying up farms as a tax loophole for years now (that's why people like clarkson buy them)rather than to actually farm. There is an argument that the iht changes will actually free up land to be farmed again. The legislation could be made fairer by putting in clauses around the productivity of the farms so that iht is not payable if it can be proved that the farm is being genuinely worked by the family, although I would imagine the majority of farms with over a million aren't solely owned by a family but are an incorporated business.

I disagree. See my earlier post about this probably hitting a lot of working class people that have worked hard to earn well. If they die in the years before or soon after retirement.

Say a property worth 700k in the SE. Mortgage free after a lifetime of working.
A DC pension pot of £425k is required to get approx. £30k for 20 years (after that state pension).

So £125k would be liable for inheritance tax as a couple.
As a sole parent £625k gets taxed.

Lots of older parents in my friendship group so a 55 year old with a 13 year old child could mean the 13 year old is taxed heavily if the parent dies.

Not if you managed to make it through primary school maths it isn't.

Is the ‘sole parent’ a widower? If so the nil rate is £1m if a property is involved. So much disinformation…

It's 40% of the 60% left, so 64% tax if taxed at 40% twice.

I agree that the loophole should be closed for the wealthy only looking to avoid it.

Not quite. By that reckoning it would be 64% not 80% because the second tax grab is only on the remaining 60% of the original amount.

If the sole parent is not a widower and the child has another parent around then £1m + is a hell of a lot for one parent to leave one child and it’s right that everything over £625 is taxed at 40%.

You want to tax inflation? Wow.

Any other plans to ruin the economy?

My problem with IHT is that Ive worked all my life, saved and been fairly frugal. In part so I could leave moneys to the children.
So we've bought a house as tenants in common, so we can each leave our half to the kids, so it doesn't go on care fees.

At some point I will be giving the kids regular payments out of excess income(tax free!).
Always use the 3k gift allowance each year.
Eventually will downsize and will be 'getting rid' of the surplus cash.

On the other hand people don't work, claim benefits half their lives and get free elderly care.

Kemi has already said that she will reverse the new farmer's IHT, I am hoping that they will abolish it completely for everyone or at the very least anyone leaving less than £2m should not have to pay anything.

I didn’t say we should tax inflation.

I’ve said that you probably haven’t already paid 40% tax on the value of your estate, if most of it is from the inflation in property value.

Which is true.

Yes lets give it all away and let the state pay for our old age, why worry about our needs in later life. Spend, spend spend and give the rest away, no money, no tax, perfect. What idiot thought it was a good idea to scrimp and save. We got it all wrong just blow the lot.

@twomanyfrogsinabox how many million are you hoping to leave to your children?

So the second time they only take 40% of the 60% they left you the first time round and 40% of any interest you made on the 60% they graciously left you, that makes it so much more reasonable. Work hard and you too can enjoy their generosity.

Sadly I agree with you.

It's disgusting that those who work hard and are financially responsible have to pay such a massive price.

No wonder IT is known as the most hated tax of all. Hugely unfair.

I am liable for a hefty chunk of IHT and I have no problem with it. I ran a business for years and although I’ve already paid a significant sum in tax over the years, that business also provided the assets that I have today. When I die, I feel happy knowing that I’ll be giving something back to the country that provided me with an educated, healthy workforce and an infrastructure which enabled my business to thrive. My children will still inherit a sizeable portion for doing nothing at all, so everyone is a winner as far as I’m concerned.

None of those working class people paid 700k for that house, most likely 90% of the money came from house price inflation so was totally unearned.

Hated by the tiny minority of people on who's estates it might be levied. Currently around 4% of the population.

It won't affect me but it doesn't bother me what other people do.

My parents both worked all their lives from 14 years old virtually until they died my father didn't make it to retirement age and they left absolutely nothing, not enough to pay for their funerals. I've worked hard all my life and have saved all my life, my DH has also worked hard all his life and is still working well past retirement age. We've paid our dues in taxes and now I'm going to enjoy spending and giving it to DCs while I'm still here, hopefully what's left will not attract IHT, I will certainly try to make sure it doesn't.

@SuzieNine

If you google what is the most hated tax it will tell you it's IH. It doesn't mention anything about being 'most hated by the 4% of people it affects'.

Many, many people, whether affected or not think it's horrendously unfair. Myself included.

I will take every legal route possible to avoid IHT. It's my money, to give to my children. IHT should be nil to children as it is between spouse's. We spend our entire lives supporting our children. Why are we not entitled to support them when we die??

We are encouraged to save for retirement, save the state money by funding ourselves, paying for our own social care, paying for pensions..... But if we don't use that, by either dying, or indeed being too healthy in old age to need care, we are penalised for doing so.

The million pounds limit to cover home and private pension, isn't that huge in the SE. And no, we didn't all buy houses at tuppence, that was the previous generation.