Tories plan to scrap inheritance tax for estates up to £1m is to cost £3.3bn!!!

[PSCMUM]

please tell me, fellow mumsnetters, that you see how awful this would be for public services???! PLease tell me you are less self preservationist than the 2 (pinstriped) aresholes on the tube with me today saying how great it would be as they would get so much more of the value of their parents houses when they died!
I bloody can't stand tories, but this policy is worrying me as it is so appealing as long as you don't consider how they are affording to make such a humungous tax cut - ie, cutting public services. Doctors pay, nurses pay, schools, hospitals, fire engines, lolly pop people, income support, legal aid, free wine for deranged left wingers on mumsnet (ooops, maybe last one just wishful thinking)

We're taxed all over the shop to help those who are less well off.

What annoys me is that everything my parents earned was taxed, every house they bought with the money they'd already been taxed on will come to me subject to yet more tax.

My folks have only the one house btw!

Since even now only 4% of estates pay IHT, it is clearly a tax on the rich, just as it was always intended to be. Just because some avaricious families in the Home Counties don't feel rich, doesn't mean that they actually aren't, by any standards, absolutely rolling in it.

actually not going to argue this as I really don't care that much one way or another. However it is a tax on the middle class now not the rich, it isn't that difficult for the rich to shelter their wealth from IHt if they are determined enough (an dmany do)

my aunt is selling her house and moving to a smaller flat so she can spend the money whilst she's healthy knowing the state will provide at least the bare necessities when she's older. I don't think that it is inherently more worthy that she will not have much of an estate to leave her children having spent it herself than my mum who wouldn't do such a thing and will therefore have a bigger estate ot leave.

Last of my opining on the subject.

Sky-rocketing property values have pushed many families (who would not have had to pay IHT in the past), over the threshold. The threshold has not been adjusted to take property values into account, and it should be.

Milliways, I'm glad you don't feel as though you have robbed the government. That makes all the difference.

Kewcumber - what about if you just lived in your house until you no longer needed to live in it, and then you left it to your kids, and they paid the IHT - would that render them destitute or something?! THey would still be getting a huge windfall, with or without IHT. Its just that with IHT as it is now, they would pay something towards the common good. And you seem really scathing about the state looking after people, some of the people who are pensioners today, living on a state pension, in a council house, and needing NHS care - they have worked all their liveS! In jobs, as parents, as members of society, they have existed among us and have contrivuted in their own way, howsoever that may be, and now they need looking after, and they aren;t as lucky as you, they didn't manage to buy a house like you, they have no assets, maybe they just made ends meet all the way thru their lives, maybe maybe maybe - people are not poor becasue they chose to be and we should be proud to look after them regardles.

20 years ago IHT was a tax on the very rich, if the threshold is not raised it will soon become another tax on the very ordinairy.

why should the threshold be adjusted to take soaring property values into account? as I say, I do think there is an argument for dferring the tax if the inheritor wants to live in the property, but that doesn't happen very often does it? in most cases, someone rich (and let's face it, it is someobody rich even if the average house price is 210k - not everypone actually owns a house you know) dies, their children flog the house and split the money. why shouldn't they pay tax on that?

I think they should lower the threshold.

iht is payable on 6% of estates. hardly ordinary. and anyway, so what if ordinary people do pay it?

ANd also - you won't need it anymore, by the time anyone is paying IHT on any of our property - we will be dead! We can grumble that our kids won';t get as much as if there was no IHT to pay, but our kids will still get extra, so whats the prob. Its not like the gvt is coming round when you are 85 and making you pay the IHT on the spot!

How about this for an idea....

inheritance per se should not be allowed, when you die, it all goes to the state, so each generation starts again, and no one can get richer and richer and richer off into the sky is the limit realms of wealth, whilst others struggle along - the state gets richer, and redistribution is a lot more generous. No one would need to worry about their children not being ok, as the state would be able to redistrbute so everyone had enough and could attempt some kind of vague wealth equality.

AM i being bonkers!?!

I don't see that taxing someone's estate when they die is particularly harsh. We are all taxed on our income and then taxed again when we spend it (VAT, customs duty).

At least inheritance tax is a tax you don't have to pay, your heirs will. And they are getting a bonus in the first place, something they didn't earn and didn't work for. (And they will have plenty left over - if you are above the threshold they get £300k plus 60 per cent of anything else).

Only problem I can see is when people who are not married share a house and one dies - it is harsh that the surviving person might be forced to sell their home. There are a couple of sisters who are taking a case to the European Court on this.

I would rather they scapped VAT, did away with the farce that is NI, scrapped inheritance tax and stamp duty, and put an extra 15p on the basic rate of income tax (which isn't that much more if you view NI as the tax that it really is).
NI is probably going soon anyway, and the basic rate of tax will go up to 30%, in a Gordon spin that TOTAL tax has gone down from 33% (basic rate 22% + NI 11%) but no mention of all the savings and investment incomes that will be caught.

My Parents have worked all their life and own a home worth about £300k + a few policies. If the house was in my Dad's name it would be liable to IHT, now in Mum & Dad's name, if Dad dies mum doesn't have to sell the house.

That's why I don't feel govt has been robbed.

I agree with IHT but feel threshold should be £450 - £500k.

I agree with it. We pay tax when we buy a house so why should my children have to pay again if they inherit it? As well as paying tax on earnings, everything we buy etc etc, the list is endless. I don't agree that just because your house is worth more then you have more money, you could have bought at a good time and your house price goes up.

Inheritance tax sometimes means people having to sell the house to pay it even if they live in it. It's just wrong.

milliways - you haven't worked all your life though have you? and yet it's you getting the money.

I hope you realise how lucky you are.

jodie - you don't actually pay tax on the full value of your house though do you?

that's one of the biggest arguments in favour of high IHT, actually: in most cases the money is actually just equity on property that no-one has ever paid tax on anyway (and even if they had - they paid the tax, not the heir).

do I win the competition for saying "actually" the most times in one post?

I thought they said on the Today program that they were going to fund this by imposing a levy of 25K per year on non-domiciled something or others with offshore bank accounts. ie filth rich americans etc
NOT by raiding public service budgets.

Does that make anyone feel better about it?

oh they just say whateever they think will get them elected

They will go back on all these promises!

Milliways, that's just your parents needing to sort out their affairs. Which they have done. It's not inheritance tax per se that's the problem, it's your parents having this old-fashioned man being the owner of the house thing going on.

I do have a huge problem with the same moneys being taxed over and over.. . . .. it's endless. Income tax (fine) then VAT, then stamp duty, then inheritance tax.

I would actually be far happier if we had first rate schools, hospitals and OAPs that were well cared for.

Instead we have a hugely expensive war in Iraq, shite schools, maternit services being shut down all over the place and OAPs who live in substandard homes.

Total mismanagement and that is why people resent paying tax over and over again when they get incredibly poor returns.

It'll get worse under the Tories mind.

sp - the threshold is £300k not £350K - means an extra £20,000 tax just on that £50,000 just seems an awful lot to me.

SP - I hope i won't be getting anything for another 20 years, when I will have worked for 40 years! Hopefully ou mortgage will be long gone & we can help out our kids.

I KNOW how lucky I will be if I do get anything (shared with siblings of course), but i feel the levels are too low. My Dad was a taxi driver and market trader - not exactly upper middle class.