Inheritance tax - a morbid tax but one which impacts a loft of middle class families

[mids2019]

Inheritance tax may be on the increase in the next budget but having just been through probate it for me thinking that iht really impacts a lot of lifetime savers and those with property.

Parents have already paid tax on the income they have saved so there is a moral question over the governments ability to.tax the money again. Is this really fair and isn't it a right we should have the ability to pass on our property to our children?

Also surely it is the middle classes that suffer as I guess anyone with serious wealth protects their assets through complex tax avoidance schemes e.g. footballers, celebs, bankers etc.

Then why make the ill informed comment that if the estate is under a million you will be fine..?

Not at all. We are not even in the Home Counties and a Victorian terraced house with 4 beds just went for £800 k

Yes but they made wise choices. Same with any investment. Some tax is fair enough - and I don't know what it currently is - but too high a tax on inheritance makes zero sense.

We should be encouraging people to create generational wealth - which incentivises them to aspire higher - and saves the government money in the long run. If all you have to consider is today and yourself - what is the point? Behaviours will simply change to adjust. Either people work just enough for their immediate needs, set up Trusts etc

Nevertheless I doubt the Starmer's plan is to to anything too drastic as he has to balance growing the economy with raising tax receipts. Difficult juggle but the announcement today would have been to prepare the electorate so that when they do unveil the budget, the plans don't seem as bad as imagined

Oh my goodness what is wrong with you 🤣

One of the housing issues in the UK is ageing population, and people in their 90s living alone in family homes. Obviously, everyone has the right to stay in their home if they wish to, but I wonder if there were real tax break incentives in terms of inheritance tax reductions for selling big family homes and downsizing or moving to retirement flats, whether that could help the housing situation.

I like to correct incorrect statements and poorly thought out answers. And you?

I don't want to have to pay it. I don't know how I could? I'm a benefits claimant with no money. So once my mum dies they'll send me a bill for fuckloads. Apparently you can't use the deceased estate to pay it? Or they won't even wait till you've sold the property?
I'm pretty scared tbh. But I know I'm fucking lucky to be in that position in the first place in many ways.

IHT is 40%. Are we suggesting all those high worth singers, celebs, footballers etc. are going to pay HMRC nearly half their wealth if they need to out of altruism to the state? Don't people tend to get rich knowing how to avoid tax and this attitude reltates to death as well?

It is the middle classes that don't have the resources to employ good accountants that take the hit surely?

It’s not a problem if someone is gappier and wants to stay in their own home. Retirement properties like assisted living are very bad investments and don’t stop folk needing to go to a care home necessarily.

This in spades.
The parents don't pay again, the people who inherit pay - who didn't earn it and didn't pay tax on it

Todays pensioners are some of the luckiest people
to ever have lived. Stable jobs, double time on Sunday and bank holidays, immediate unreduced and often enhanced pensions from age 50. We’re still paying for these pensions as taxpayers for many public sector pensioners.

Not all pensioners are so lucky I know, it’s mainly middle class ones. Those just on state pension often did work very hard throughout their lives and now live in poverty

So I’m not going to feel sorry for anyone “suffering” inheritance tax.

And you wouldn’t pay IHT on that, if you are part of a married couple leaving it to your children.

Modest (ish) sized, but still an expensive house.

The experience does not match reality you are supposedly presenting

Some of the estate may be liquid?
some banks may release funds direct to HMRC
as the executor you can organise a loan

Honestly the prices are silly here

I feel for people forced to move out of their childhood homes if they're forced to sell in order to pay the inheritance tax, so I think the tax should only be required if the beneficiaries aren't living in it as their home.

The same goes for social/council housing: it's incredibly traumatic to have to vacate your lifelong home within a few weeks of bereavement because your parent was the tenancy holder.

I think homes should be kept for relatives to continue to live in. It builds community and social cohesion.

If we're talking about money, and large sums of it, of course inheritance tax is a social good. All the evidence shows that society's are happier the smaller the gap between rich and poor.

Disingenuous middle???????

Cheaper areas are available (I live in one). You're still well off to afford a house that price, however modest you might think it. It's also still below IT threshold for a couple.

my experience is: estate 450 k tax to pay.
estate 775k no tax to pay.
it’s incorrect to state that under a million you will be fine.

ONLY 4% OF ESTATES PAY IHT

Yabu.

They do need to tighten the loopholes to make sure the ultra-wealthy (including the Royal Family, including the Heir to the Throne) pay it properly (I wouldn't object to a ceiling that set a maximum for the top 25 wealthiest estates, perhaps with some kind of meaningless kudos attached like a knighthood for the heir so that there was an incentive not to avoid it)

Less than 4% of estates pay IHT. The vast majority of middle class people with capital have less money than the thresholds, a huge number have virtually nothing to leave.

Where an estate does have to pay IHT it is very unlikely that the bulk of the estate came from taxed income or assets that had CGT on them - much more likely to have been unearned appreciation of assets that have increased in value. Even where this isn't the case it's perfectly normal for a tax to be applied when money changes hands even if tax was already paid by the initial holder eg VAT.

Whining about the tax only demonstrates that you have absolutely no idea how fortunate you are compared to most.

Have you actually got experience? I’m the age where I am surrounded by people inheriting what’s left after care home fees

Paying tax on my death is far preferable to paying tax during my lifetime. No issue with inheritance tax.

plenty, unfortunately