Inheritance Tax

[Luckydip1]

Rushi Sunak has floated the idea of abolishing IHT, at last, this has got to be the most hated tax in Britain. Why tax people on what they have already been taxed on. Now I can pass my house onto my children without it having to be sold to pay IHT.

Perhaps@Gasp0deTheW0nderD0g , but realistically, if someone bought a house 40 years ago for £30 or 40K, it’s never going to go back down to that again. And people live so much longer nowadays.

It's a headline grabber and a vote winner that will boost the Torys in the polls, nothing more nothing less. They have done this in the past just making noises that it was being discussed but nothing ever happened. The country is broke, NHS falling apart, do we really need to cut IHT to benefit the top 3% right now.

You can leave a million to your children if each spouse has a mirror will and the estate includes the family home.

Even so, the limits could be indexed perhaps, rather than outright abolished.

@Abra1t But if you’re divorced like @franke’s late Mum, you can’t!

I agree that IHT needs to be reformed, rather than completely abolished.

It's a vote winner but i don't get it as so few people are impacted by it. Most parents can pass 1m on without tax

Why would you think this was the most hated tax in Britain?

It is hated but as I said it's stupid

There is fiscal drag on the bands but I think it impacts income tax far more

Would it be better to just make the tax a mandatory 1% on everything that is left by everyone. A million pound estate pays £10.000, a thousand pound estate £10.00? That way everyone pays something towards the many services we receive and there is no need to undertake complex arrangements to avoid it

She was widowed, no children and left everything to a niece and nephew. They had to pay a huge amount of IHT due to the house appreciation (she’d lived there 50 years).

If they (or rather, the estate) had to pay a "huge" amount of IHT, they must have inherited loads. Hundreds of thousand of pounds each.
I don't see any issue with taxing that.

And if it came predominantly from the increase in the value of her house, it wasn't previously taxed money either, for those who use that argument.

My father's estate had to pay a smallish amount of IHT, mostly due to the fact that they bought a house in the home counties in 1970 & lived in it until they died. I think that's fair enough & my estate will probably have to pay as well.
To me the worst bit is that the IHT needs paying within 6 months. We were fortunate that my dad's savings & shares added up to almost exactly the amount of IHT, but it can be a problem raising the funds.

It’s unfair if you are single and childless. Dh’s uncle died last year: never married, no children, estate was left to a family member but of course tax to pay.

Tbf, I don’t know how much IHT they paid as that’s their business. I just know that they were taken aback as it was more then they’d anticipated. Plus they had to pay within six months before probate was granted so they used their own savings.

But, as she was a 90-year-old widow living in a 2-bed bungalow who went on coach holidays, I really doubt she had hundreds of thousands to leave. 😂

My point is that it’s not just the uber-wealthy who pay IHT nowadays, because they have the shit hot accountants who use various tools like trusts to avoid it.

Not that I have anything against the uber-wealthy, it’s just that the current IHT threshold and structure seems off.

But, as she was a 90-year-old widow living in a 2-bed bungalow who went on coach holidays, I really doubt she had hundreds of thousands to leave.

@HamBone if they paid IHT, she had at least £325k to leave. If they paid "huge amounts" of IHT, it must have been a fair bit more than £325k.
They'd had received the £325k tax free.

I do think the way it's paid should probably be adjusted if the money is in property. But then you wouldn't want people hanging onto the house and never paying the tax just because the house hasn't sold, when actually they're making no efforts to do so.

you get £325,000 tax free but you can leave a further £175,00 tax free but only to a spouse,civil partner, children, Grandchildren, adopted not sure about S children.
There are ways around it by gifting property at least 7 yrs before your death but that’s complicated if it’s property because I don’t think you can do that without paying rent if you continue to live there. Otherwise people would do it to avoid paying care home fees.
I think it would be fairer if you were allowed to leave your money to any family members.
i’m not an expert it’s only what I’ve read on Government website but hope the law might change before I get there.

@WeWereInParis Well yes, her estate was clearly more than £325. Say it was £725K to keep it simple. That’s £160K IHT to pay.

That’s a huge sum in most people’s eyes. Again, my point is that at the current threshold, with people living longer and houses appreciating, not only multi-millionaires’ estates pay IHT. When we read “the top 3%” headline, I think most of us assume that it is.

Perhaps everyone is happy with that though; personally I think that the current threshold is too low.

I'm sick of the rich avoiding it! Duke of fucking Westminster I'm looking right at you

https://www.theguardian.com/money/2016/aug/11/inheritance-tax-why-the-new-duke-of-westminster-will-not-pay-billions

Had the Grosvenor estate bequeathed to the new Duke of Westminster been liable for 40% inheritance tax, the amount owed to the Treasury would have been not far off the government’s entire death duty take for the last financial year.

Hugh Grosvenor, however, avoids a significant cut to his £9bn inheritance because the estate is held in a trust

@Certainlyreally This is exactly what I’m saying. The truly wealthy can use various tools to avoid IHT, it’s those slightly over the threshold who pay it!

Tbf, I don’t know how much IHT they paid as that’s their business. I just know that they were taken aback as it was more then they’d anticipated. Plus they had to pay within six months before probate was granted so they used their own savings.

They must have inherited at least £170k each to have a significant bil. I wouldn't feel too sorry for them! Plus there are schemes to help you spread the cost over many years, with interest. So no need for upfront payment

Anyone can leave their estate in a trust. You do it if you're jealous!

You'll have to pay 6% of its worth to the gov every ten years though.

The Duke of Westminster's wealth does not avoid IHT. It pays it every 10 years at 6%.

The thing to consider is replacing IHT with CGT on death. No concerns over double taxation, it is fairer and will not lead to a major fall in tax revenue.

I mean... the PM and his family would benefit A LOT from this change.

Most IHT is not money that has been already taxed. Its just unearned income from rising house prices

Rishi Sunak's kids will benefit hugely from scrapping IHT.

YOU aren't taxed on it twice - you're dead!

The person who receives it has not been taxed on it, so it's taxed before it hits them. Not that hard to understand.

Something like 3 per cent of deaths led to an inheritance tax bill last year. Why get worried about this: it doesn't most people.

Why do you think he can afford to even float this?! He's not actually giving people anything back, just a back handed to the children of a handful of multi millionaires..

No they won’t. His wife’s a billionaire. The super-rich don’t pay IHT.