What's wrong with selling a house you don't live in?

[Kendodd]

On the back of the NI increase.
If an elderly person living alone moves into a care home, well, why wouldn't they sell their house anyway? They're not going to be going back to live there, the house would be sitting empty and we don't have enough houses for people to live in. The elderly person would then also have a huge amount of money to supplement their income in their last few years. As far as I can see the benefits for everyone far outweigh any reasons for keeping the house.

For what it's worth, I don't think there should have been an NI rise or people paying a fortune for their own care. I think inheritance tax should have been increased instead. I don't get the outrage about selling houses nobody lives in though.

@Nosferatussidebit it's not deliberate deprecation of assets. I am entitled to retire at whatever age I wish and do what ever I wish with my money. I can choose to be more frugal and work for longer to save for my kids or I can choose to downsize, retire early and spend my money on holidays. I have chosen to work for longer - if the rules change I will not

[quote whatthejiggeries]@Nosferatussidebit it's not deliberate deprecation of assets. I am entitled to retire at whatever age I wish and do what ever I wish with my money. I can choose to be more frugal and work for longer to save for my kids or I can choose to downsize, retire early and spend my money on holidays. I have chosen to work for longer - if the rules change I will not [/quote]
Not necessarily in your case, but disposal of assets to reduce care costs, is.

I would be spending because my kids would be getting less inheritance so I might as well spend it. I am healthy and have the assets to retire at 50 if I wish - but there would be nothing left to inherit. I am not avoiding paying for a care home and have no reason to believe I should need one - therefore that classification doesn't fit

Where does it stop though. Would you be happy to be told that if you were a single person you have to sell your house because you can easily live in a bedsit? Or if you are overweight you are not allowed to buy certain foods because excess weight causes so many health issues that the NHS then end up sorting out?

Of course they shouldn't be made to sell. Young people can't get on the property ladder. They have worked hard and contributed their whole lives to NI so if they want to pass on their hard work to the next generation why shouldn't they.

The way I see it, the choice should be that we pay significantly higher taxes (to fund free social care) and get to leave an inheritance, or stick with a low tax burden (as we have now) and inheritances should be capped. On a societal level you can't have it both ways and get good quality social care for all.

I personally think that inheritance tax should kick in at a much lower threshold, say £100k, and be used to fund social care. And also should be increased to 50%.

@EmmaGrundyForPM

I personally think that inheritance tax should kick in at a much lower threshold, say £100k, and be used to fund social care. And also should be increased to 50%.

That's just daft. People will spend, spend, spend. I know we would.

@EmmaGrundyForPM

I personally think that inheritance tax should kick in at a much lower threshold, say £100k, and be used to fund social care. And also should be increased to 50%.

Do you understand inheritance tax is calculated on the value of all assets? So say this new tax never happened. That means the cap on lifetime care costs of £86k would also not exist. So then we tweak IHT. This would result in next to nothing to pay for social care because well off people would still have to sell their home to pay for care BEFORE THEY DIE, thus leaving nothing to tax AFTER THEY DIE. Those without means, the disabled and not home owners would still be subsidised by those who do pay.

@Nosferatussidebit it isn’t deprivation of assets if you are fit and healthy. It’s only deprivation if you could not anticipate that you would need care at that time. So if you gift you children a house deposit in your 60s when you are fit, still working it wouldn’t be deprivation.

Under the new proposals anyone with over £100k still has to pay for their care as before. This effectively is a form of inheritance tax in some ways, although payable before you pass away. So someone with dementia who was well off would pay say £200k for care then inheritance tax on top.

@PlanDeRaccordement yes, I do understand that.

So, if the government put the money in (they can find billions for Test and Trace servces) but also set IHT much lower, people could sell or not sell their houses at the point of going into a care home, whichever they chose, but if they sold the money would be part of their assets and on their death would be taxed accordingly. There would have to be caveats etc to make sure that the money wasn't spent.

My mums house is worth about £400,000. If she goes into care, it will be sold and used to pay her care fees. If she doesn't go into a care home, my sister and I inherit £200,000 each, tax free, which we've never earned. That's ridiculous.

If social care is free to the user after a threshold/cap then if Mum stats at home she pays for her care out of her savings/income. When she dies, her house is sold. Sister and I get the first £100k tax free and then 50% of the remaining £300,000. So between us we inherit £250,000 not £400,000. And there is £150,000 in the social care pot.

@elbea

Surely most of the people who are having to sell up for care homes haven’t estate planned very well. If people are sure they are going to pass property on you would put it into trust or gift it long before you needed care. If you do this when you are fit and healthy it isn’t deprivation of assets.

I agree. People need to wise up to future planning. Setting up a POA for finances and health, and life rent trusts should be done years before you think it might be needed.

Saying that, some local authorities are going over trusts very carefully, one of the councils where I live is looking to go over people’s finances for the preceding 14 years if they suspect deprivation of assets.

The 7 year thing is also a myth. What that refers to is a disregard for inheritance tax, not deprivation of assets.

As our solicitor said to us, there are no guarantees with a life rent trust, but it’s as safe as you can make your assets at the moment.

We’re in our 50s and about to set it up.

They have worked hard and contributed their whole lives to NI so if they want to pass on their hard work to the next generation why shouldn't they
Because everyone is having to pay in order for a few to be able to inherit. Millions of people who will never get an inheritance are forking out to secure other people’s inheritance. That’s wrong.

@whatthejiggeries

I would be spending because my kids would be getting less inheritance so I might as well spend it. I am healthy and have the assets to retire at 50 if I wish - but there would be nothing left to inherit. I am not avoiding paying for a care home and have no reason to believe I should need one - therefore that classification doesn't fit

Then the VAT and duty on your spending will boost the tax coffers to day for care 😀

Loving all the people who hate that they might be taxed to pay for others care but are perfectly happy to dispose of their assets so others have to pay for theirs.

@Boomkin

They have worked hard and contributed their whole lives to NI so if they want to pass on their hard work to the next generation why shouldn't they Because everyone is having to pay in order for a few to be able to inherit. Millions of people who will never get an inheritance are forking out to secure other people’s inheritance. That’s wrong.

This. And I speak as someone who is likely to inherit

If social care is free to the user after a threshold/cap then if Mum stats at home she pays for her care out of her savings/income. When she dies, her house is sold. Sister and I get the first £100k tax free and then 50% of the remaining £300,000. So between us we inherit £250,000 not £400,000. And there is £150,000 in the social care pot. So expressed like that, it is a tax on those whose parents have long drawn out illnesses.

The argument that why should the taxpayer pay to protect someone’s inheritance because inheritance is unfair ignores all those inheriting because their parents didn’t need care, or had their care paid for. That’s also unfair. The difficulty is always in finding a way to tax wealth which is a) fair and b) doesn’t have unwanted side effects

@countrygirl99

Loving all the people who hate that they might be taxed to pay for others care but are perfectly happy to dispose of their assets so others have to pay for theirs.

I’m perfectly happy to pay for others and potentially myself, but not through National Insurance which is yet another tax on middle earners. Put a penny on income tax across the board then it’s fair. But that won’t happen because tories

That's just daft. People will spend, spend, spend. I know we would.

Well what's wrong with elderly people going on a big spending spree? They'd be paying VAT on their spending and the spending would create jobs. I very much doubt many of them would sell their home and leave themselves homeless and if they downsize, well personally I think that's better for everyone.

If I give money to my kids they would be free to spend more from income too!

@MereDintofPandiculation
sorry I probably wasn't expressing myself well. I mean that the low IHT threshold should apply to every estate, whether or not the deceased person ever used social care.

I just think the NI increase is so unfair on lower paid workers who are essentially paying so that middle class people like me get a bigger, totally unearned and untaxed, inheritance.

@judgerindersminder I quite agree. It should be Income Tax and IHT. And I speak as someone who will stop paying NI due to age in a couple of years. There's a lot of it should be paid for from tax, but not from tax paid by me going on. My parents house will likely all go on care as my mum has Alzheimer's but is physically very fit but I would rather that than the current proposals which penalise the low paid to preserve inheritance.

@EmmaGrundyForPM people need to be able to enjoy the fruits of a lifetime’s work and pass them on to their children. Otherwise why would any of us get out of bed in the morning? Luckily you are not PM of your proposed communist regime.

Actually IHT does already clobber those who don’t use care and will still do under the new regime.

I just think the NI increase is so unfair on lower paid workers who are essentially paying so that middle class people like me get a bigger, totally unearned and untaxed, inheritance. You're not wrong (although inheritances are taxed, albeit with a high allowance). But I think everyone wants to help their children/grandchildren, and it's heartbreaking to have your entire efforts wiped out by a misfortune that you can't insure against.

Especially when with so man of us, the money is spent on keeping us alive to suffer a life which we don't want.

Actually IHT does already clobber those who don’t use care and will still do under the new regime. Only if you're leaving £325k (£500k if it includes your house). New regime starts to clobber you at £20k.

[quote TorringtonDean]@EmmaGrundyForPM people need to be able to enjoy the fruits of a lifetime’s work and pass them on to their children. Otherwise why would any of us get out of bed in the morning? Luckily you are not PM of your proposed communist regime.

Actually IHT does already clobber those who don’t use care and will still do under the new regime.[/quote]
I don't have children and still manage to get up in the morning. Quite the paradox.