Budget 2015

[Mattywerewolf]

Not sure I understand this 7 year rule. See this section from the above

Does it make any difference when I give money as a gift?
Yes, though this rule really only makes a practical difference for the elderly and people who are terminally or seriously ill. That is, any gift given more than seven years before your death is automatically exempt from Inheritance Tax. In addition, any gift given between three and seven years before your death will be liable for Inheritance Tax at a reduced rate - this is known as 'Taper Relief'."

After 7 years the gift is exempt from tax. Between years 3 and 7 it ratchets from 100% down to 0% at 20% per year. So if you gift now and die in 2 years they pay tax on 100% of the gift at your marginal tax rate, if you die in 4 years time you would pay tax on 60%, after 7 years you pay nothing. At the time of gifting its called a potentially exempt transfer (PET for short)

 

[Simster]

why should they *have to* pay tax on it? really thats what is at the heart of the IHT debate, the very essence and principle of the right of the state to tax. in general taxation we sort of let it go by, we accept we need to pay taxes for services, and muddle along with it. IHT highlights the raw principles of taxation because it is essentially saying the state owns you and all you do even when you die: if you've saved more than x amount, HMRC is going to take a cut.

The bit I've highlighted is complete and utter tripe. Totally laughable. Good grief. Tax is a part of civilised society. If you don't like it, I guess you could always go and live in Haiti or some other third world dump?

Let's ne clear about this:
If you leave an estate of £320,000, no tax is paid by anyone
If you leave an estate of £500,000, £72,000 is paid in tax and a chosen few benefit to the tune of £428,000. For doing NOTHING!
If you leave an estate of £1m, £270,000 is paid in tax and a chosen few benefit to the tune of £630,000. £630k for doing NOTHING!!!

And if not inheritance tax, a tax that nobody is penalised for and does more to reduce the disparity of wealth than any other policy, then that shortfall needs to be made up elsewhere. Where would you prefer?

 

[Bold Seagull]

Are they really? In 2013 according to the parliament UK briefing papers only 6% of estates were worth over £325,000. That is hardly taking the piss. It's another sop to either the already inherently wealthy who just continue on their own merry way with their family wealth, something the current cabinet would know an awful lot about. Or those who have benefited from owning a property in a particularly desirable part of the country which is UNEARNED income.

What's taking the piss is thinking that £325,000 is not a lot of money.

The average UK house price is £179k. For a semi detached house its £171k, for a detached house its £282k.

I was about to type the same thing, the vast majority of hardworking people will not have accumulated enough for their beneficiaries to need to pay IHT.

 

[El Presidente]

Not really, no. And in any case, where would you add tax to make up for the shortfall? Income tax? Penalise hard work. VAT? Horribly regressive.

Tax people who still use Internet Explorer, if they're that stupid, they deserve to have money taken off them.

 

[Simster]

Tax people who still use Internet Explorer, if they're that stupid, they deserve to have money taken off them.

I like that. But what about if your workplace insists on using this crock of shìt?

 

[Hotchilidog]

The average UK house price is £179k. For a semi detached house its £171k, for a detached house its £282k.

I was about to type the same thing, the vast majority of hardworking people will not have accumulated enough for their beneficiaries to need to pay IHT.

Exactly, but those who maybe in the possession of such a prized asset couldn't care less about the vast majority of people who would dream to have such riches at their disposal. This basically sums up the entire ethos of this government, they actually think sums such as £325,000 are pocket money.

 

[El Presidente]

The bit I've highlighted is complete and utter tripe. Totally laughable. Good grief. Tax is a part of civilised society. If you don't like it, I guess you could always go and live in Haiti or some other third world dump?

Let's ne clear about this:
If you leave an estate of £320,000, no tax is paid by anyone
If you leave an estate of £500,000, £72,000 is paid in tax and a chosen few benefit to the tune of £428,000. For doing NOTHING!
If you leave an estate of £1m, £270,000 is paid in tax and a chosen few benefit to the tune of £630,000. £630k for doing NOTHING!!!

And if not inheritance tax, a tax that nobody is penalised for and does more to reduce the disparity of wealth than any other policy, then that shortfall needs to be made up elsewhere. Where would you prefer?

The problem with IHT, is that if you are seriously rich your accountant with arrange your affairs (via trusts, planning, offshore etc) so that you pay nothing. If you are not wealthy it doesn't affect you, so it tends to target people who are to an extent stuck in the middle.

 

[El Presidente]

I like that. But what about if your workplace insists on using this crock of shìt?

It's career change day! Having said that my employer uses it, and I have had to SNEAK Chrome onto the system when they weren't watching, which has upset the bearded dribbling brigade.

 

[Brovion]

The whole inheritance tax issue could have been avoided if Osbourne and implemented my very sensible suggestion of taking all the money off all the rich people by force and then having them all shot.

 

[Pavilionaire]

Are they really? In 2013 according to the parliament UK briefing papers only 6% of estates were worth over £325,000. That is hardly taking the piss. It's another sop to either the already inherently wealthy who just continue on their own merry way with their family wealth, something the current cabinet would know an awful lot about. Or those who have benefited from owning a property in a particularly desirable part of the country which is UNEARNED income.

What's taking the piss is thinking that £325,000 is not a lot of money.

What's taking the piss is paying for the fallout of banker's greed with the money from dead people. £325K threshold frozen for 6 years, twice as many Estates paying IHT as prior to 2009. I'm going to stop talking about this now, it's a marmite issue.

 

[Simster]

The problem with IHT, is that if you are seriously rich your accountant with arrange your affairs (via trusts, planning, offshore etc) so that you pay nothing. If you are not wealthy it doesn't affect you, so it tends to target people who are to an extent stuck in the middle.

That's probably true. So how do you disguise real estate?

 

[El Presidente]

The whole inheritance tax issue could have been avoided if Osbourne and implemented my very sensible suggestion of taking all the money off all the rich people by force and then having them all shot except for Tony Bloom.

Corrected for you x

 

[El Presidente]

That's probably true. So how do you disguise real estate?

Paint it with camouflage paint, or transfer ownership to a trust.

 

[Mattywerewolf]

Paint it with camouflage paint, or transfer ownership to a trust.

yep Equity release is popular

 

[Brovion]

Corrected for you x

Cheers! (I hadn't really thought it all through properly, had I?)

 

[Driver8]

After 7 years the gift is exempt from tax. Between years 3 and 7 it ratchets from 100% down to 0% at 20% per year. So if you gift now and die in 2 years they pay tax on 100% of the gift at your marginal tax rate, if you die in 4 years time you would pay tax on 60%, after 7 years you pay nothing. At the time of gifting its called a potentially exempt transfer (PET for short)

Tapering only applies where the gift is in excess of the nil rate band (£325k per person). Gifts below this simply reduce the nil rate band if death occurs within 7 years with the result being effectively 40% tax on the whole gift for seven years.

 

[Thunder Bolt]

The average UK house price is £179k. For a semi detached house its £171k, for a detached house its £282k.

I was about to type the same thing, the vast majority of hardworking people will not have accumulated enough for their beneficiaries to need to pay IHT.

That's taking into account the very low prices of houses in the north. In Sussex, an end terrace house is selling for £200K.

Imo, Inheritance tax threshold should rise to £600K.

 

[El Presidente]

That's taking into account the very low prices of houses in the north. In Sussex, an end terrace house is selling for £200K.

Imo, Inheritance tax threshold should rise to £600K.

Try living up NORTH, it's GRIM.

 

[Thunder Bolt]

Try living up NORTH, it's GRIM.

I did, and escaped.

 

[Driver8]

That's taking into account the very low prices of houses in the north. In Sussex, an end terrace house is selling for £200K.

Imo, Inheritance tax threshold should rise to £600K.

It's £650k for a couple already as spouses inherit their partners Nil Rate Band provided it hasn't been used.