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

289 replies

PSCMUM · 01/10/2007 19:42

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)

OP posts:
PeachesMcScream · 01/10/2007 23:02

Only read the OP and we should also consider the impact on charities of this legislation. Some people give to charity through their will cos it's better than giving it to the tax man. Wouldn't be so much of an imperative if this came in. This could well have a long term effect on charity income, which could be significant given the top 10 charities, for example, get millions each year from legacies. Just a thought.

WendyWeber · 01/10/2007 23:03

Oooh, they first mooted this in August, I started a thread on it then but SP wasn't around to make better arguments for me (being a bit busy at the time )

If the average house price is c £210K, and the threshold is £300K, then it's nearly 50% above the average - which is plenty for 90% of the country

Tortington · 01/10/2007 23:19

i didn't make an assumption i asked a question - becuase i didn't see what your benefits rant had to do with anything.

ebenezer · 02/10/2007 07:10

Custy - see 21.27 post yesterday from reallytired - that's the relevance.
Ihere seem to be an awful lot of references to people being 'lucky' to own houses that are worth a lot of money, the assumption being that we don't spend years of hard work paying the bloody mortgage on it. Personally I couldn't give a stuff what my house is worth - prob some ridiculouly inflated price which is no help to me whatsoever cos if I sell it I'll pay another ridiculous;y inflated price to live somewhere. And when I look at my dcs I dan't begin to imagine how they'll ever be able to buy anywhere to live - until dh and I fall off the perch and then have some inheritance - but, whoops, the govt will want some of them, because hey, it's not like we pay enough into their coffers already. And from there its a very short leap to see why people like reallytired get pissed off with a system that doesn't encourage you to work hard and take responsibility for yourself. It's a fact that my 17 yr old dd would find it easier to get a place of her own to live in and benefits to support her if she got herself up the duff rather than if she carries on at college - and that's a bloody disgrace. Anyway, I'm off to school now to earn a crust and pay my iaxes!!

ebenezer · 02/10/2007 07:12

whoops taxes - god hope my spelling improves before first lesson today

ebenezer · 02/10/2007 07:24

Oh and another point - the relevance of the benefits system is that if the system was so inefficient, then money wouldn't be wasted, which directly links to the argument some people are saying that the govt needs IT. eg my dd's friend whose father is a lawyer earning 6 figure sum and the daughter gets £30 a week allowance for staying at school cos she happens to live mainly with mum who chooses to not work!! Whereas dd gets nothing cos she has two parents who live together and both work! That's a fecking joke. Multiply that a few hundred thousand times and its a lot of money.I can't remember the figures for how much benefit fraud, absent parents not paying maintenence for their children etc costs the country but I know its a mind blowing amount. And if the govt got its act together and reformed the system then those of us who already pay our dues wouldnt constantly get hammered for more. So THAT'S the relevance.

ebenezer · 02/10/2007 07:25

WASN'T so inefficient of course. God I really must go!!

WaynettaVonBlood · 02/10/2007 07:48

Say I bought a house 10 years ago for 40K.
Today that house is worth 150K.
I want to move house, but some of the arguments on this thread state that because I haven't earned the 110K price rise, I onlu deserve to be able to spend 40K
So therefore, we should never buy shares, our invest our money, our, heaven forbid, open a savings account, because we didn't work for that money?
I am obviously missing something here........

I totally agree that taxation is necessary. I totally agree that there are inefficiencies in the system. I get totally wound up by the fact that DH and I (and all of you) work very hard for our cash. I pay tax on that, that's fine. I have decided that in order to offer my children a more secure future I will stay in paid employment for a few more years. From my previously taxed income I must pay my nanny (and the tax that goes with that). I pay my council tax. We aer fortunate (but not 'lucky') to be able to afford a nice house; however we do not have every gadget known to man, nor do I wear the latest fashions. we do not go on holidays without saving for them. I am that my children will not, under current IT rules be able to benefit from my work and my decisions when DH and I pop our clogs.

ImBarryScott · 02/10/2007 08:01

but they will !
they get £350000! with no tax! and they haven't blardy worked for it.

WaynettaVonBlood · 02/10/2007 08:05

Which is less than the average house price where I live.
They haven't worked for it, but I have, and I paid all the bloody taxes on the house as well when I bought it, and I should therefore be entitled to dispose of it how I see fit, not how the government sees fit.

fircone · 02/10/2007 08:06

i am so incensed over iht that i wrote a letter to the torygraph. guess what - they didn't publish it!

the abolition of iht will create a chasm of inequality. It will not only reinforce social divisions, but regional ones too.

Someone may have worked hard all their life, and saved, but because they live in a less prosperous area, their children will cop a fraction of what someone's children in, say, Surrey will get.

The situation at the moment is that brains, or hard work, or ambition can get you the life you want, no matter where you come from. OK, theoretically, at least.

But in the future, if some people are inheriting vast sums, or even very decent amounts, the playing field is completely skewed. People will be buying up property with their windfalls, putting houses even further out of reach for many, and think of all those people able to pay for their dcs to sail through university free of financial responsibilities, and then set them up in a house...

Oh, it's just so unfair, but I think most grannies in the home counties will be already setting out for the polling booths to put their X in the Conservative box.

WaynettaVonBlood · 02/10/2007 08:10

Fircone, I am confused.....yes someone in a less prosperous area will theoretically inherit less than someone in Surrey , but surely that's the same as now, with the limit in place?

fircone · 02/10/2007 08:22

But the sums that will be inherited in the years to come are very large - not a difference of tens of thousands, but hundreds of thousands.

Another point - the Conservatives round here want to reduce pensioners' council tax. Eh????!!! A few may be in distress, but many, many over 60s here live in a very nice houses, thank you, with nice lifestyles to boot. If they can't afford to live there, then downsize, or release some equity. I can't believe the next thing is that I'm supposed to subsidise some people's inheritance.

ImBarryScott · 02/10/2007 08:31

waynetta - as previously noted, I live in London zone 2, so am no stranger to high house prices. Still I don't see why I should mind paying tax if I'm fortunate enough to be gifted a massive amount of money.

fircone - agree re the oldies as well. dh's grandad has a small income, but lives in equity heaven in an expensive part of cheshire. why anyone should subsidise him i don't know.

SueBarooeeooeeooooo · 02/10/2007 08:54

Bloody Socialists.

ImBarryScott · 02/10/2007 08:56
Wink
CapitalistSockpuppet · 02/10/2007 09:08

Bah! Typical tax and spend, politics of envy!

Eliza2 · 02/10/2007 09:13

I can't understand that some people here would rather have moderately prosperous British tax-payers paying IHT than ultra rich non-domicileds paying a levy?

edam · 02/10/2007 09:19

People are lucky in the sense that booming house prices have made them asset rich. If you are fortunate enough to have bought at the right time, you are much richer in terms of assets than someone who is starting out now, or who is renting. Applies to any of us who own houses that have gone up hugely in value - Dh and I have more than £200k equity in our house at current prices, not because we've worked hard to add £200k of value, but because house prices are mad. And that's on a modest 3 bed that would have been a starter home when it was built! It just happens to be in a 'good' town in the commuter belt around London.

We have worked hard to pay the mortgage but no harder than lots of people who haven't been as 'fortunate' on paper.

edam · 02/10/2007 09:20

£300k is not 'modest'. And that's what you get free of inheritance tax. It may not feel as if you are rich because you don't have the benefit of that money day to day. But your heirs do, when you die.

edam · 02/10/2007 09:21

I'd like the non-doms to pay their fair share too. Personally if there are any tax cuts in the offing, I'd rather they went on council tax, which is a. extortionate and b. regressive so unfair on the worst off and even average earners.

MintyDixCharrington · 02/10/2007 09:28

I don't understand why people think they should have some sort of "right" to inherit what their parents earnt, without paying tax on it.

It strikes me that it is the least painful tax possible. The person who is paying it is dead so couldn't care less, the person who gets the remainder of the estate should be grateful that they are getting anything at all.

The best way to avoid paying inheritance tax is by spending/giving it all away before you keel over IMO.

Thus speaks the socialist princess

eleusis · 02/10/2007 09:37

Oi Minty, how are you? (excusing your socialist leanings for the moment to check on your health)

Anteater · 02/10/2007 09:45

Anyone who is liable to an IHT bill of over £1 million will 'most certanly' have measures in place to minimise any payments.
All this measure will do is make the planning process easier.

I think inheritance tax is immoral
Any inherited money would be taxed, when spent, thro out fabulous VAT system!

bozza · 02/10/2007 09:52

So what if £350K is less than the average house price where you live? I really don't buy that arguement. DH and I have been buying our house for the last 10 years but since all our parents are alive and well we have been doing it without a massive inheritance (1K from DH's grandmother which went towards our deposit). Hopefully we will have paid off our house by the time we inherit anything from any of our parents - and we will not be inheriting £350K either, unless there is a huge family rift, because we both have siblings. An inheritance is a nice bonus but you can't really expect to be gifted the value of a debt-free house.