Oh what a surprise - Tories say inheritance tax unfair

[WendyWeber]

BBC

What do they mean, ???

They are a damn sight richer than those who own no property and have no estate at all

so if we die tomorrow, then not only do our dc not have parents anymore, they dont have a roof over their heads either?

Oh, fucking stamp duty. God knows what the point of that is. I think it's "because they can".

With children you leave your estate to them in trust until they are 21 - I think that's a different issue (you do have wills, do you, cylon?)

And hunker!!!!! You bad mouse!

Agree re stamp duty.

Anybody know what happens when you can't pay the inheritance tax as all the assets being taxed are tied up in the house which can't be sold? Could the Revenue seize your assets to pay the bill and effectively leave your children homeless? Now perhaps I should be interested.

From here

I know a little bit about inheritance tax since my dad died 3 years ago...

No tax is paid by a surviving spouse, so even if the house is worth double the iht threshhold if it's in joint names then no tax is payable on the first death.

Then you can do a 'deed of variation' on the dead person's Will up to 2 years from the date of death. You can get a solicitor to set up a 'Nil rate discretionary trust'. This costs around £2000 to set up but effectively preserves most of the value of the nil rate band at the date of death, thus saving 40% of £285,000 or whatever the figure is at the date of death.

If the estate is worth much more than £570,000 you'll obviously be paying 40% tax on the remainder, but someone's got to pay taxes!

I know, WW, I know. We meant to do it after we moved

It's all relative, isn't it? If you live somewhere where house prices are high, it's likely that your cost of living is mahoosive. DH and I work bloody hard, pay a fair whack in tax already, have a large mortgage and don't have any "extra" - we've not been on holiday since 2001 (our honeymoon), we aren't extravagant with clothing, car, food, etc - it's just expensive to live in London.

I've just read the rest of my original link:

The threshold doubled from 88 - 97, but then inflation generally was sky-high in those years, thanks to who knows who - in what sense is this a Labour stealth tax???

Yes, agreed, it is much harder for young people getting established in places like most suburbs of London; but inheritance tax isn't generally about them, but about their grandparents who bought their houses for £750 in 1938 or whenever.

Something does need to be done about house price inflation (swingeing taxes on estate agents' profits springs to mind) but whingeing about inheritance tax isn't a solution.

I think the reason it is a stealth tax is because the thresholds for paying the tax are not keeping up with house price inflation so more and more people are being sucked into paying it. It could be argued that it is a clever way of getting more tax - putting up the threshold but not putting it up enough to keep it as a tax on those who really are wealthy.

Not saying that is right or wrong but just how the comment could have arisen.

(Scrabble back up, btw)

WW - it isn't the grandparents who have to pay the tax though it is those children who have to find the money.

But if you look at average house prices (nationally, admittedly) the thresholds are in line and it isn't a stealth tax. (Our house's value has = approx the national average for 20 years or more so I know )

It does clobber people in the SE more but many of them have benefitted enormously from the price rises there - as I said, you can't have it both ways.

Niecie, the grandchildren "find it" from the value of the grandparents' estate - not from their own money.

And if their grandparents spent all their money on beer and fags and lived in a council house instead, whoopee! No tax to pay!

(Oooh, thanks, hinker! I am v behind!) (But must go to bed!)

And with 4 posts in a row (well 5 now) I will say goodnight all

Not really a motivational way to get people to improve themselves, WW

Sorry

True though

Well, sadly, yes.

But WW they can't have the money until they pay the tax.

Inheritance tax was invented years ago to redistribute wealth from the very wealthy to the poor. That is no longer the case in the SE of England and all those other properyt hotspots where it isn't just the very rich who are getting clobbered. What the gov't is effectively saying is that if you work hard and save for your old age, invest in property and become as self-sufficient as possible so that you can afford your own home and aren't a drain on SS we will tax you. However, if you never invest in property, expect the state to house you, spend all your money on booze and fags and or whatever takes your fancy we'll let you get away without paying a penny. You are effectively being taxed on taking responsibility for yourself.

That is fine if you are earning a packet but it isn't fair on the ordinary bloke in the street who has worked hard to look after his family.

But Niecie, what about this? (I quoted it below)

When my dad died (intestate) a few years ago the executor was a solicitor who handled the whole thing including the sale of the house; any costs were paid by them before the proceeds were distributed. Wouldn't that apply to inheritance tax too? (There wasn't any in his case as his estate wasn't large enough, but I assume that if there had been the solicitor would have arranged things)

I suppose the 10-year thing applies to things like farms where the property is the family business and they don't want to sell.