Government looking at inheritance tax

[HarryVanderspeigle]

It says on the news today that the treasury are looking at reforms. Potentially looking at increasing the seven year rule, or a lifetime gift allowance. I don't really see how that would work as we all know that wealthier people will spend more on their children for things like weddings, university expenses, getting on the property ladder etc. But if it is to be reformed, how would you do it?

I often wonder if the objection is because 40% is so high. Would it actually raise more if it became 20% on estates over £100k? I can't see them putting the percentage up and we all know that very rich people find loopholes anyway.

Most of the people I know, self employed and managerial types, have already hit the pension ceiling. They were told, but a handful of years ago, to pay the max into their pensions to enable a fully funded retirement. Now, they are being penalized for doing as they were advised.

That's what people are cross about. Save a million for a comfortable retirement ( not as comfortable as similar people in the state sector, but tough), and then if you happen to die too soon, we'll take it off you. Well bloody hell, I should have just blown the lot on holidays and fast cars then.

I think so yes
You've developed your property
So there’s capital gains on the % you’ve developed
You may argue that’s taxed money you’ve spent on developing it but that’s just the same with developers

Because if your parent is over 75 when they die you will have to pay tax again to withdraw the money from the inherited pension fund. It would make more sense to abolish the tax free withdrawal if parent dies under 75 than to add a double tax.

Maybe we should have let the disabled relative go into care and the state pay all the costs then, and not bother with the extension!

Yes. It’s after you’ve declared to Hmrc
Not after you’ve got probate

Thats the problem. You can’t sell a property without probate but you need probate to pay hmrc
( Some banks allow access to pay for funerals without probate )

True

Thats irrelevant

People can chose to extend if they like.
It is however developing and the value of a property increases in m2. Whatever it’s used for is irrelevant.

They don’t take it off you when you die because you are dead

people who did not earn or save it - just happened to be born in a certain family currently can inherit obscene amounts of money

we need to raise taxes because we need to sort out education, caring for the disabled , healthcare- all things that have been cut to the bone and then a bit over the last few decades

pay now or pay later - simple choice

and don’t yell take it off the rich - that’s what this is proposing it’s just no one likes to think that they might class as rich

id be happy for the top 20% to be paying inheritance tax as a start but the top 4% - that should catch the rich

bug we could try and aim for the top half as a way to try and balance out inequality

UK already has one of the worst IHT regimes in developed world.

Take Germany as an example - it's not just land ownership (self-use) and prime residence are exempt and many other assets. Then each recipient has personal exemption (400k children, 500k spouse).

But for all remaining assets, after prime residence and personal exemptions, there is only 15% IHT on the amount below 600k (remember that's does not include prime residence) and then 19% for amounts between 600k and 6m if passed to spouse or direct descendants. The max IHT in this case is 30% which only kicks off after 26m!

Germany isn't exactly the worst place to live and not too far to fly if you miss London, but where would you rather be if you have something to pass on to your kids?

German public services are incomparable better than in the UK. Why do we need to raise even more?

Or how about the govt tries cutting the massive amount of spending and waste and tries to get the 6 million people on benefits (which costs hundreds of billions) into work? Socialists never realise that the higher the tax rate the less money they actually get (see the Laffer curve) as people change their behaviour or just give up or move abroad as many are doing. As Mrs T said correctly they always run out of other people's money.

They don’t take it off you when you die because you are dead

You are splitting hairs to support your argument. They take it off your estate, the estate you have worked for (in the majority of cases), usually over a very long period.

IHT take has gone up every year since 2010 (google is your friend). This year will be the highest it’s ever been at around £9billlion and it is forecast to increase substantially with changes to pensions and business relief.

That is £9billion robbed from bereaved families every year.

Agree wholeheartedly. We’ve been taxed heavily on it already so paid our due. Everything dh does is for the kids.. why bother working to build assets if we can’t leave it to them?

I’m sure many people in favour of increasing this disgusting tax wouldn’t be so keen if they had to pay it.

100% this I think it is a terrible tax. My DM still works FT in a minimum wage job at 72. She has already paid tax on her earnings and savings and if passed to us will be taxed again? Outrageous

she shouldn't - she should stop, spend all her savings / take equity, go on cruises. If she doesn't have enough money left she'll go on benefits and state will pay for her care. Labour will take everything she has, what's the point?

All the people saying they don’t want to pay tax on their money as they’ve already been taxed on it are missing the point entirely. You are not paying the tax (you are dead), it’s the people receiving the money who pay the tax. I am all for it and am happy to pay if I ever inherit. I live in the South East and normal semi detached houses are now worth £800k. That’s a lot of money to pass down to your kids and it will just make things more unequal when other people will end up with nothing.

If your father has passed away and they were still married, your DM would have inherited his tax free allowance ... then if she leaves her estate to you and/or other DCs, that allowance increases again. So unless she has over £1 million when she dies, you won't pay any IHT.

And it wouldn't be her 'paying tax again' it would be you.

This in itself is what is going to make "the wealth gap" larger, and possibly why this is being looked at .

As a country there is a top heavy amount of people over 60, who are going to die within the next 20 years. They will be in two distinct halves - those that have houses to leave and the that don't. Those that have houses to leave will be leaving approximately £300k as that is the average house price

And it wouldn't be her 'paying tax again' it would be you.

Again, it’s the estate that will pay.

Better or worse I can't see he's anything but very fortunate

So do you own such house? are you happy for your DC to pay IHT on it?

So has she got more than £325k in savings plus a house worth over £175k if she hasn't her estate won't be taxed.

That's right it doubles for a married couple.

Labour will tax anything. No surprise they are going after inheritance tax, if your aspiration for your kids is anything other than life on the dole you need to be taxed back into Labour party line.

Wrong
You may be dead but it is a tax on the deceased money
Entirely dependent on that. Not a tax on those who inherit