Inheritance tax changes

[AhBiscuits]

Any speculation on what changes will be made? Is anyone trying to put measures in place before the budget?

My dad died suddenly in August. His estate is not liable for inheritance tax as he left his home to me and my siblings, he had inherited my mum's nil rate band and it was under a million in value. I have made sure to get the probate application submitted this week though, because who knows?

My inlaws have just signed their second home over to DH and his brother and are now renting it from them. They expect to live much longer than another 7 years. They are hoping this will remove this property from being part of their estate. But again, who knows.

I don't agree with inheritance tax. People have worked hard for their money and were taxed on it. It should be theirs to use as they wish without another tax. It was really important to my dad, and it clearly is to my inlaws, that we inherited when he died. He lived frugally, despite our protestations, with this in mind.

As for your second point, whilst the tax system isn't perfect (it's far too complicated to ever be perfect!) I suspect you're ignoring the way tax is being used to incentivise genuine productivity growth (company investment), capital risk (also needed for growth), and time lags (money which remains invested doesn't incur income tax... until it's taken... and then it does)

I don't have time to read into it just now, but will try to later.

Or even better, why don't you?

Instead of just accepting the trope 'Rishi Sunak paid less tax than me last year' (which must surely strike you as odd and warranting verification!), ask yourself what really happened and why. Do some Google searches into the different types of tax, how much is charged when and why - and think about it.

I'm not denying that the very wealthy can use schemes to reduce their tax, by the way. Of course they can. But they still pay enormous amounts of tax.

You need to consider what they're paying, what's reasonable, and what's achievable (given the options they have).

Wasn't multi-millionaire Rishi Sunak's tax rate only about 24% as a lot of it came from capital gains rather than income? That is ridiculous.

There has always been a fear that multi-millionaires are mobile while PAYE tax payers are not and there are always super wealthy individuals who threaten to leave the UK if Labour are elected.

My inlaws have just signed their second home over to DH and his brother and are now renting it from them.

So the rent they pay will presumably be subject to tax and the house when sold will be subject to CGT (which is as like to go up as IHT) .

I hope they took carefully considered advice before rushing into this before we even know what the budget will say.

If they've officially bought it then won't your dh now get clobbered for second home council tax?

found this thread because looks like papers are speculating all over again about next budget and likely tax changes, for years they have said with this government and the conservatives before them that they will change IHT and likely raise CGT again, last budget the changes to IHT applied to farmers, and of course pension pots, which only applies of course to those not in annuities or defined benefit schemes who have saved into pension pots (many being advised to do so to avoid IHT but their financial advisers). Some posts on here have been interesting, but I don't agree with the argument you have already paid taxes on earnings to invest or buy property, because you have also already paid tax on earnings when you purchase something with VAT... or taxes on plane tickets etc.

Also trying to lie or dodge IHT by gifting property is not advisable. A post about gifting a property to children who then pay rent doesn't give the full picture, but yes they must pay the going market rent, records when transferring the property to the children will be held with costs and stamp duty would to be paid on the transfer, if the children have their own homes this is then a second property and CGT will be payable at up to 28% on full gain, even if the estate was below IHT - so it could leave them with a higher tax bill if the estate in total including a property is worth less than £1 million. And yes income tax on the rent will be due, it could tax them to the next tax bracket and loose them child benefit. If the occupiers needed to go into a care home do they have the money to fund it? If this was part of the plan to avoid fees, it likely won't work and be seen as a deliberate deprivation of assets. I wonder whether the solicitors who organised this explained all this?

There is a chance IHT could be changed and aligned with CGT and a fixed rate applied to all estates over a lower threshold even? In France the tax rate paid by the beneficiary depends upon their relationship to the deceased, so children pay less than nieces and nephews for example, and with a special allowance for dependents with disabilities. Current rumours and they are only press gossip, are that the 7 year rule could be removed and to compensate the gifting allowance increased. This would be a bit of a headache for executors and/or solicitors, sifting through to find any gifts . You are obliged to keep a record of all gifts over the threshold to make calculations easier - anyone thinking they can lie should be cautious, there is a women in prison for lying in probate and many others get huge fines on top of tax bills every month for hiding gifts.