Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

MNers without children

This board is primarily for MNers without children - others are welcome to post but please be respectful

Childfree - inheritance

53 replies

EmmaEmerald · 17/11/2023 13:33

Really chaps my ass that people assume if you're childfree you don't want to leave to your money to anyone and therefore have no stake in inheritance tax.

Grr.

OP posts:
Sisterpita · 17/11/2023 20:51

@EmmaEmerald
marrying your friend or having a Civil Partnership is not such a daft idea. There was a case where two men did just that.

The other option is to leave anything above the tax free limit, currently £325k to charity. Basically you get to choose where your money goes rather than to HMRC.

Sweepit · 17/11/2023 21:27

TheValueOfEverything · 17/11/2023 20:43

But their “legacy” does go to their loved ones.

Minus a percentage which goes to the people as taxable income. To pay for GPS, hospitals, schools, roads, etc.

Surely you agree that’s fair. Especially for people who aren’t lucky to receive an inheritance. Or why bother having a tax system and public services at all?

Personally I do think that is fair and I don't think the op is saying it isn't fair. The issue is parents telling non parents they shouldn't care what the rules around inheritance tax are because they don't have kids. If parents are allowed to think the rules are unfair then people who aren't parents should also be allowed to have that opinion\concern.

catsanddogsandrabbits · 17/11/2023 21:40

I take your point exactly OP - and agree with you.

If you leave your house to your kids they get £500 tax free. If you don't have kids but you leave your house to your favourite niece or your best friend that tax free allowance is drastically reduced. Effectively those without kids are penalised.

Secondly no-one cares "when we are dead" but we care now about what happens to people we love after we are dead. So those that make that observation are missing the point you're making.

stayathomer · 17/11/2023 21:44

I think it’s insane people think inheritance tax is a fair tax! The amount of people I’ve heard of that couldn’t afford to keep the childhood home their parents wanted them to keep because of inheritance tax, only Rich people can afford to inherit!!

Nesbi · 17/11/2023 22:05

Isn’t it part of the system to incentivise people to have children, including via tax?

From a societal standpoint children are an essential resource. We need children because a society that doesn’t constantly replace its members with younger people who can undertake work and care for ageing members of that society is doomed to fail.

If children are a resource that every society needs, we have to acknowledge that providing that resource is incredibly time consuming and very expensive.

Part of that expenditure is borne by the state, and part of that expenditure (ideally a much larger part) is borne by parents who are ultimately providing that resource.

You might argue that sufficient people would choose to provide children under any circumstances, but in fact low birth rates in a large number of countries are enormously concerning, and we may find that that the demographic shift towards an ageing population leaves us with an insufficient number of children to carry the burden of society.

It is therefore not unreasonable to take the view that inheritance tax is primarily aimed at encouraging people to have children who will directly benefit from that tax break.

To play devils advocate, If it isn’t encouraging people to have children then what is the point of it?

VitoCorleoneOfMNMafia · 17/11/2023 22:57

Nesbi · 17/11/2023 22:05

Isn’t it part of the system to incentivise people to have children, including via tax?

From a societal standpoint children are an essential resource. We need children because a society that doesn’t constantly replace its members with younger people who can undertake work and care for ageing members of that society is doomed to fail.

If children are a resource that every society needs, we have to acknowledge that providing that resource is incredibly time consuming and very expensive.

Part of that expenditure is borne by the state, and part of that expenditure (ideally a much larger part) is borne by parents who are ultimately providing that resource.

You might argue that sufficient people would choose to provide children under any circumstances, but in fact low birth rates in a large number of countries are enormously concerning, and we may find that that the demographic shift towards an ageing population leaves us with an insufficient number of children to carry the burden of society.

It is therefore not unreasonable to take the view that inheritance tax is primarily aimed at encouraging people to have children who will directly benefit from that tax break.

To play devils advocate, If it isn’t encouraging people to have children then what is the point of it?

From a societal standpoint children are an essential resource.

Thank you for this! I get so fed up when people frame having children as a choice made freely. Us non-parents only get to not have kids because other people are having them. Once you realise that children are a resource, you realise that women carry out reproductive labour for the State by gestating and bearing children.

In terms of Inheritance Tax, I favour Land Value Tax, paid annually on the sale value your land would have if it was unimproved, as a much fairer tax on property. The super-rich put all their property into trusts and change the trust beneficiary to avoid paying Inheritance Tax, they couldn't do this with LVT, nor could they offshore it the way they can with shares and money.

musixa · 17/11/2023 23:56

Sweepit · 17/11/2023 21:27

Personally I do think that is fair and I don't think the op is saying it isn't fair. The issue is parents telling non parents they shouldn't care what the rules around inheritance tax are because they don't have kids. If parents are allowed to think the rules are unfair then people who aren't parents should also be allowed to have that opinion\concern.

100% this.

EmmaEmerald · 18/11/2023 01:08

@VitoCorleoneOfMNMafia you want to tax property annually?

presumably in a leasehold flat, I'd be exempt from a Land Value Tax but who would do the valuation and what would it be for?

OP posts:
TheValueOfEverything · 18/11/2023 01:10

Nesbi · 17/11/2023 22:05

Isn’t it part of the system to incentivise people to have children, including via tax?

From a societal standpoint children are an essential resource. We need children because a society that doesn’t constantly replace its members with younger people who can undertake work and care for ageing members of that society is doomed to fail.

If children are a resource that every society needs, we have to acknowledge that providing that resource is incredibly time consuming and very expensive.

Part of that expenditure is borne by the state, and part of that expenditure (ideally a much larger part) is borne by parents who are ultimately providing that resource.

You might argue that sufficient people would choose to provide children under any circumstances, but in fact low birth rates in a large number of countries are enormously concerning, and we may find that that the demographic shift towards an ageing population leaves us with an insufficient number of children to carry the burden of society.

It is therefore not unreasonable to take the view that inheritance tax is primarily aimed at encouraging people to have children who will directly benefit from that tax break.

To play devils advocate, If it isn’t encouraging people to have children then what is the point of it?

Interesting post. Every tax has a societal and personal incentive component and IHL is partly to encourage people to have children.

VitoCorleoneOfMNMafia · 18/11/2023 01:56

EmmaEmerald · 18/11/2023 01:08

@VitoCorleoneOfMNMafia you want to tax property annually?

presumably in a leasehold flat, I'd be exempt from a Land Value Tax but who would do the valuation and what would it be for?

My suggestion is based on Henry George's idea of a land tax. George's idea had a loophole because tax would have only been paid when the land was sold or inherited, whereas nowadays the richest use trusts to stop land from being inherited.

Land Value Tax is when you tax the value of the unimproved land, so if there was a field where your block of flats is, the tax would be based on how much that field would be worth. The valuation takes into consideration all the stuff around that adds and removes value from the land, such as roads, nearby water and other utilities to connect to, schools, etc. The valuation would assume planning consent to build a building exactly like the one that's currently there.

The valuation would be done like Council Tax is done now, but on the value of the plot of land, not the land plus buildings. The value would be reviewed every now and then, meaning that the recent CityFibre rollout to my street would increase the valuation of my plot at next review because having fibre to the premises internet available to the plot makes the plot more desirable to a builder.

The purpose of this tax would ideally be to replace all taxes that punish hard work and inventiveness, such as income tax and taxes on buildings. It would incentivise landowners to do something with high-value land, like build dwellings on it. Land in urban areas tends to be more valuable than rural land, so it would encourage more urban housing to be built, putting people near their workplaces and hospitals and other useful services. It would deter the speculative land purchasing that leads to refuse-filled wastelands and derelict buildings in towns and cities, because that land would cost the owner money for every year they owned it and they wouldn't be earning from it by leaving it undeveloped. It would stop the current situation of inheritance tax bills forcing children to sell their dead parents' home, because there would be no inheritance tax any more. And it would be impossible to evade Land Value Tax because you cannot offshore land and persistent Land Value Tax defaulters would have their land confiscated by the State.

The moral reasoning is that there's a fixed amount of land and the only reason why any of us "own" a bit is because at some point in the distant past someone helped themselves to a bit and killed anyone who disagreed with them. By rights, we should all pay ground rent to everyone else on "our" bit.

George's suggestion of how to spend the money was on pensions for the old and an "adulthood launch" lump sum at 21, except that only men would get it 😕 I suggest that mostly spending it on the things we already spend taxes on would be a better alternative.

And yes, in a leasehold flat, your landlord would be paying it, and they would inevitably pass the cost to you, but you wouldn't pay Council Tax or Income Tax any more.

KimberleyClark · 18/11/2023 07:34

My nephew will get anything that’s left. But we’ve been ordered by my DB not to leave him a huge lump sum as he’s going to be very well provided for by his parents.

burnoutbabe · 18/11/2023 09:27

KimberleyClark · 18/11/2023 07:34

My nephew will get anything that’s left. But we’ve been ordered by my DB not to leave him a huge lump sum as he’s going to be very well provided for by his parents.

I haven't been ordered but I will have similar

Parents are fairly okay. Sister and I inherit 50/50 (at maybe age 60)
Then I go and my nephew, only child, gets it all from me and sister plus parents wealth.
This is why I don't mind it being taxed. It's just a windfall for him at 40/50. Not needed particularly.
I'll probably add cousins and their kids in too for fixed sums.

Land tax suggestions are expensive to administer if done annually and hard to pay if you need to pay something if you don't have cash.

Iht is mostly easy to pay as the person assets are all being sold or passed on to someone else so paying a bill then is easy. (Ignoring the 2 sister case which is an outlier)

I will benefit from being left my parents house but as sister and me are 50, we're going to do nothing more than immediately selling it.

It's a nice exemption on top of the usual iht limits but really unnecessary (bar say in farming families or maybe young kids needing housing by a family member)

daliesque · 18/11/2023 11:36

musixa · 17/11/2023 18:51

If all goes to plan, I will spend every last penny on myself.

If it doesn't, it's going to charity.

My plan exactly. My partner is a few years older than me so likely to go before I do. He's leaving his money to his kids which is fine. I have more than enough for myself.
I have no relationship with his kids and nor do I want one. I also have no relationship with my nieces and nephews and nor do I want one. My philosophy is that I've earned my money all by myself with no support, so I shall have fun spending every last penny 😁

Of course in the real world it'll all go on care home fees, but hey, a girl can dream.

VitoCorleoneOfMNMafia · 19/11/2023 07:53

Land tax suggestions are expensive to administer if done annually and hard to pay if you need to pay something if you don't have cash.

This differs from Council Tax and Vehicle Excise Duty how?

Iht is mostly easy to pay as the person assets are all being sold or passed on to someone else

And easier to dodge with a trust. The Duke of Westminster didn't pay IHT on his land and he's the richest man in England, because one of his ancestors put it all into a trust and the current duke was made the beneficiary of the trust when the old duke died.

babbygabby · 19/11/2023 08:01

I actually don’t understand why it would bother someone so much to pay tax on it. Of course someone childfree will have loved ones to pass things on to but my thinking is for those loved ones it’s an additional “bonus” & would they mind losing some to tax? My dc are in my siblings will but I don’t expect my sibling to take the same steps I would as parent to reduce their IHT. The best thing to do is downsize early & get rid of as much as possible but that’s a sacrifice & could be complicated if care is later required.

babbygabby · 19/11/2023 08:05

Isn’t it part of the system to incentivise people to have children, including via tax?

well that’s failed.

You might argue that sufficient people would choose to provide children under any circumstances, but in fact low birth rates in a large number of countries are enormously concerning, and we may find that that the demographic shift towards an ageing population leaves us with an insufficient number of children to carry the burden of society.

we are there now, any growth in population now is due to immigration. We already have more over 65 yrs olds vs under 15 yrs old.

Lampan · 19/11/2023 08:22

I don’t think tax incentives to encourage people to have kids would have much effect on someone who was undecided about having kids. Especially since the cost of raising children is likely to be significantly more than any tax savings. Plus a lot of people don’t know or understand the tax rules anyway.

But yes of course people without kids are allowed to care about IHT. It’s not just about who they might leave their money to, I suppose some are also interested in their own potential inheritance and how that might be affected by any changes. I personally don’t think anyone should expect or rely on a potential inheritance but there will be some who do.

Flamingbow · 19/11/2023 08:28

but On the principle of it, I paid the government tax already so whoever gets my estate, it's like taking the 40% off the pennies on a dead man's eyes in a way

Are you genuinely saying the value of your estate hasn't increased in value since you purchased/acquired it? I don't know any areas where property prices have fallen in the past few decades, so yes, there is a portion of the value which has not yet been taxed.

Have to say I am happily childfree and intend to remain so, and have never encountered this or giving it a second of thought until now. I also don't know any other people without children who speak about this- do you really think people care? I've only ever heard people talk about whether they believe inheritance tax is fair or unfair overall rather than giving a shit about whether you have children!

IGotItFromAgnes · 19/11/2023 11:09

Most of my estate is going to charity anyway, so I can’t get too excited about this. I’d prefer it to go to charity than to the government!

There are people I care about, and I’ll leave something to them, but I don’t think I have the same “stake” in things being handed down to future generations as I would if I had children.

110APiccadilly · 19/11/2023 13:30

Inheritance tax has an impact on everyone, because it impacts on society in various ways. Suggesting you shouldn't care because you don't have kids (or suggesting you shouldn't care because you don't have anything to leave, for that matter) is as daft as suggesting non-drivers shouldn't have an opinion on fuel duty, or non-smokers on tobacco tax.

Levriers · 20/11/2023 16:13

No partner here . I have left a couple of smallish bequests to family friends’ children. I have cousins who have children but we aren’t close. The rest goes to charity. I’m not sure on IHT but I thought I remembered that if you leave to charity there’s no IHT payable ? But I might be wrong there - happy to be corrected

TheValueOfEverything · 20/11/2023 20:23

IGotItFromAgnes · 19/11/2023 11:09

Most of my estate is going to charity anyway, so I can’t get too excited about this. I’d prefer it to go to charity than to the government!

There are people I care about, and I’ll leave something to them, but I don’t think I have the same “stake” in things being handed down to future generations as I would if I had children.

But inheritance tax doesn’t go to the government, it goes to the people.
As it does if you bequeath it to a charity.
the difference is that you choose either the Government or a charity to distribute the money. By economies of scale the government* can probably stretch it further.

*probably not applicable to the current Tory gov!

IGotItFromAgnes · 20/11/2023 20:33

TheValueOfEverything · 20/11/2023 20:23

But inheritance tax doesn’t go to the government, it goes to the people.
As it does if you bequeath it to a charity.
the difference is that you choose either the Government or a charity to distribute the money. By economies of scale the government* can probably stretch it further.

*probably not applicable to the current Tory gov!

Nope, it goes to the Government - or at least they decide how to spend it. Much rather it go to a charity of my choosing. They’ll use the money more wisely.

NeonSoda · 21/11/2023 10:52

Yes, I agree this is really frustrating.

I plan on leaving everything to my best friend - I'll shortly be putting my house into trust with her so that she wouldn't have to pay tax on it should the values go up.

Ruminate2much · 23/11/2023 04:09

I don't know much about inheritance tax, and I'm not currently a home owner.
But I know I find the assumption that non-parents have nobody to leave anything to very offensive. I had this experience just yesterday! A (no doubt well meaning) lady telling me I should buy a caravan in a caravan park to live in, as it didn't matter that they go down in value, as I don't have to worry about leaving anything to anyone! I don't have any desire to buy a caravan in a caravan park ever, for all sorts of reasons, so it was a frustrating conversation. But most importantly, I absolutely want to leave something behind for my nieces and nephew if possible. I base a lot of my decisions with that in mind. So, yes...