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.

She can give away £3k per year tax free if she wishes and also unlimited gifts of £250 to different people.

I think most banks will pay funeral expenses from the deceased’s account and some banks will release money with death certificate only. My dm died last year and bank of Scotland released £8k to me with death certificate only.

She can currently give away unlimited amounts but if she passes away within 7 years there’s a sliding scale of IHT that the gift will be subject to.

Yes we had that too
although Santander wouldnt unless we opened a probate account with them. They transferred the money into that
That was 2012ish

lloyds, Halifax ( part of same group) Barclays, Nationwide

all realise money with death certificate under x y or z amount - but under around at least £25k
without probate

I think one of the challenges of dealing with estates is that banks have their own rules and they are not uniform and having an extra layer of admin at a time when you are grieving is unnecessary imo.
I also found that some banks were completely clueless. One refused to tell me the account balance without a grant of probate. Not sure how they thought I was going to complete the probate application without the estate value!

Royal bank of Scotland too.

Yes we know that but that’s not the point.

I know
We had that too
They told us to search the house for statements which we said we’d already done

I couldn’t even get a very basic ball park figure.
The system is absolutely crap

So what is your point?
if you want to reduce potential IHT liability then give some money away.
Personally I think that the fact that single people with no direct descendants only have the £325k allowance is even more unfair. The IHT threshold hasn’t been been frozen since 2006 (I think ) so an estate worth £425k pays tax of 40k and yet an estate of 1 million may pay nothing if widowed and leave house to a child or grandchild. That is really unfair!

Agree . It’s absolutely shocking.

@catsareace do you think your mother’s estate will even be liable for IHT on her death? I ask because you say she’s working at a minimum wage job at a fairly advanced age. Unless she’s living in a house worth more than a million (and is or was married) it’s unlikely.

Maybe there’s a recognition there for the personal cost of bringing up a child and provision of future tax payer

I doubt it. But maybe

I bought my London flat by saving a deposit myself through my 20s too (though it took me 8 years, because I was buying on my own). But I don’t begrudge those who receive family help to get on the property ladder. Why would I? Not all jobs pay enough to save a deposit, and some people’s circumstances (e.g. having kids) makes it harder to save. I would rather people had the security of home ownership - yes, even “ordinary people”, as you put it - and couldn’t care less if they had family help.

if you want to reduce potential IHT liability then give some money away.

Fine if you have a crystal ball and know you are either going to die young or never need care.

I agree.

if you’ve got spare cash you don’t need to live on you could give it away. If you want
Why not

Give it away when you are older, I have several relatives that gave away three k per year once they hit 75.

Exactly.
We have ones that paid Uni fees, holidays for relatives. House Deposits

Their money
They can do whatever they like with it

You’d have to be careful of deliberate deprivation of assets (if there’s a reasonable expectation of having care at the time of gifting) but yeah I agree in general to get it all spent and gifted whilst you can, also set up trusts.

Everyone just gifts money whilst they are alive anyhow and therefore big chunks of wealth for deposits and other things are given this way - it reduces the liability for inheritance tax. As others have said Hardly anyone actually pays Inheritance tax but a lot of people receive large chunks of untaxed gifted wealth. There was a bbc podcast on this a while back around the time of the book “Inheritocracy”.

People screaming about abolishing inheritance tax need to ask themselves how they would feel if they weren't going to get a penny, whilst other people just by the sheer luck of popping out of the right vagina will leap frog them with significant inherited wealth and be able to live substantially better lives. And by that I mean being able to buy more assets, and their kids being able to buy more assets etc. When people hoover up the assets, it makes life shitter for everyone else for whom everything becomes a little bit further out of reach, things that would once have been within reach.

Inherited wealth, of which the biggest portion is unearned housing wealth, needs taxing more. The inequality is out of control, and I think those who shout the loudest about inheritance tax are those who know they are set to be one of the big winners. Imagine if you weren't, what would it look like then? Because I really don't think any of those shouting 'hands off, my money' would be sanguine about becoming poorer in real terms while mates and co-workers get to cash in and live the good life.

Put it in an investment bond, not currently assessed for care costs, so long as its done before you get ill or think you might.

Anyway, who says that IHT will be looked at? sounds like either another scare story or a sounder outer.

Scrapping the 7 year rule would raise a pittance, the PO Scandal alone is over 10 billion.

What possible difference would it make to the less well off if you taxed inherited wealth at 60% instead of 40%?

All you'd do is make sure everyone lives in private rented accommodation and has SFA.

I would prefer CGT on the profit from the sales of property, as many European countries do, would reduce property prices and stop people flipping property.

Equally most people who shout the loudest about wanting higher or more death taxes are those least likely to inherit

Those who shout the loudest about more and higher taxes on higher earners and the wealthy are those that won’t be affected

Those delighted at taxing education didn’t have their kids in private schools

People not affected don’t care about the affect on others
This isn’t a political strive for equality.

This is just OK if it’s not in my back garden

Thats no way to run a country