Darling doubles Inheritance tax threshold

[Moshe Gariani]

What this means is that most people needn't worry about setting up distressing and complicated wills and can rest assured that the house will go to their kiddies.

so it's a good thing...? that will benefit more people from lower down the IHT scale than those higher up...?

sounds alright to me...

 

[Buzzer]

so it's a good thing...? that will benefit more people from lower down the IHT scale than those higher up...?

sounds alright to me...

Yep. Much better (I'm debating with you - d'oh!). Stops accountants like me charging the earth for setting up complicated tax planning.

 

[Barrel of Fun]

so it's a good thing...? that will benefit more people from lower down the IHT scale than those higher up...?

sounds alright to me...

Not especially. It only benefits those that are married as the £300K threshold remains, shirley?

 

[Moshe Gariani]

I'm not even gonna bother arguing with you anymore. You're so entrenched in your petty class wars that you're impervious to debate.

since when did writing off a perfectly sensible and fit for purpose policy as "hasty and ill prepared thinking" constitute "debate"....?

the Tories don't like having the popular (but cheap) tax break rug pulled from under them - tough!

 

[Moshe Gariani]

Yep. Much better (I'm debating with you - d'oh!). Stops accountants like me charging the earth for setting up complicated tax planning.

you might be able to answer a question for me... will the Trust Funds set up under the old system still have any value (i.e. increase tax free amount) - or not...?

 

[Buzzer]

Not especially. It only benefits those that are married as the £300K threshold remains, shirley?

Civil partnerships count too apparently.

and don't call me shirley.

 

[Buzzer]

you might be able to answer a question for me... will the Trust Funds set up under the old system still have any value (i.e. increase tax free amount) - or not...?

Pass....I'm guessing that the types of people that have set up Trusts will have assets in excess of £600k anyway.

...also, I'm sure crafty accountants like me will persuade those people to revise their tax planning in the light of the changes to set up new trusts ...for a large fee

 

[Moshe Gariani]

Pass....I'm guessing that the types of people that have set up Trusts will have assets in excess of £600k anyway.

...also, I'm sure crafty accountants like me will persuade those people to revise their tax planning in the light of the changes to set up new trusts ...for a large fee

sounds about right - could be a bit of a bonanza for you

 

[Dave the OAP]

Yep. Much better (I'm debating with you - d'oh!). Stops accountants like me charging the earth for setting up complicated tax planning.

and my point above about occupational pension schemes?

 

[Barrel of Fun]

Civil partnerships count too apparently.

and don't call me shirley.

I wonder if bigamists get double tax breaks, if their spouses were to pass away before them. I guess both marriages are declared null and void so he/she would be paying top whack on both 'sets of estate'.

I understand why they have to disinclude co-habiting, afterall, you could move any old sailor in to avoid paying inheritance tax on the estate, but it does seem a little unfair on those that do not wish to get married.

 

[Buzzer]

I wonder if bigamists get double tax breaks, if their spouses were to pass away before them. I guess both marriages are declared null and void so he/she would be paying top whack on both 'sets of estate'.

I understand why they have to disinclude co-habiting, afterall, you could move any old sailor in to avoid paying inheritance tax on the estate, but it does seem a little unfair on those that do not wish to get married.

I'll take a punt, Paul, and say that common law marriages will also be included (surely to be challenged under the Human Rights Act, if not). This change, after all, is designed to enure that children inherit their parent's house - irrespective of whether the parents are married or just cohabiting. Seems fair to me, despite what the Daily Mail would say about the sanctity of marriage, as it would be in the spirit the change is intended.

By the way - only bigamous marriages are null and void. The 1st marriage is a legal partnership.

 

[Barrel of Fun]

I'll take a punt, Paul, and say that common law marriages will also be included (surely to be challenged under the Human Rights Act, if not). This change, after all, is designed to enure that children inherit their parent's house - irrespective of whether the parents are married or just cohabiting. Seems fair to me, despite what the Daily Mail would say about the sanctity of marriage, as it would be in the spirit the change is intended.

By the way - only bigamous marriages are null and void. The 1st marriage is a legal partnership.

Is that really the design?

My hmble musings would suggest that a £600k house/estate would be passed onto the remainining widow(er) IHT free, but when the last parent dies, then the property/estate would be liable to pay IHT over the £300k threshold, which remains the same. So in effect, safeguards the home of the remaining spouse whilst they are alive. Of course, all this can be avoided anyway, by each parent having a share of the property anyway.

 

[Buzzer]

If you are in an occupational scheme that is totally impracticable isnt it!

I pay 6% of my gross income and my company pay 10%. I cannot afford to spend 16% of my income into a share scheme, and I am sure my company would tell me what orrofice I could stick my suggestion that instead of paying into a scheme, they should instead give me the money so I could invest it!

My point was that given a choice between entering a pension scheme or choosing not to and buying shares instead, I'd say there's no incentive to join a pension scheme.

The big caveat to this is in your case. Your employer makes whopping great contributions to the scheme so it clearly is beneficial. In my example, I was assuming that employers made no contributions as is the case with self-employed people and a lot of lower paid people with crap employers.

Sorry should have made that very clear. I think the lesson here is that the government are doing you no favours with you investing in a pension. It's the good grace of your employers.

As a last point - you can't choose to buy shares/property/a share of a vinery and call it a pension. It has to be registered and administered under strict rules. So you are right, you can't ask your employers to invest in a non-pension investment and get pension relief. And they would undoubtedly tell you to stick it!!

By the way all - A big caveat here on my posts. These are only my opinions and it does not constitute tax advice or investment planning. Please do not make investment decisions based on my ramblings here. Get a good accountant or financial adviser before making any decisions.

 

[London Calling]

I wonder if bigamists get double tax breaks, if their spouses were to pass away before them. I guess both marriages are declared null and void so he/she would be paying top whack on both 'sets of estate'.

I understand why they have to disinclude co-habiting, afterall, you could move any old sailor in to avoid paying inheritance tax on the estate, but it does seem a little unfair on those that do not wish to get married.

.........its also back dated........................................Labour are really ensuring that get the marginal vote

 

[Alex Alex Dawson oo! oo!]

I'll take a punt, Paul, and say that common law marriages will also be included (surely to be challenged under the Human Rights Act, if not). This change, after all, is designed to enure that children inherit their parent's house - irrespective of whether the parents are married or just cohabiting. Seems fair to me, despite what the Daily Mail would say about the sanctity of marriage, as it would be in the spirit the change is intended.

By the way - only bigamous marriages are null and void. The 1st marriage is a legal partnership.

But isn't 'common law marriage' a myth and hasn't existed in English law since the 18th century - i.e. how could you include something that doesn't exist?

 

[Buzzer]

Is that really the design?

My hmble musings would suggest that a £600k house/estate would be passed onto the remainining widow(er) IHT free, but when the last parent dies, then the property/estate would be liable to pay IHT over the £300k threshold, which remains the same. So in effect, safeguards the home of the remaining spouse whilst they are alive. Of course, all this can be avoided anyway, by each parent having a share of the property anyway.

No, no, no.

If one parent dies then the other parent can inherit everything tax free irrespective of any thresholds. Transfers between spouses are exempt IN FULL and that's always been the case. (but parent one then has £300k of unused allowance that is wasted). Under new rules that £300k can be used by parent 2 to against their estate increasing their threshold to £600k.

It can be avoided anyway by parent one using all their threshold but lots of people choose not to make a will, or choose to give everything to their spouse or feel uneasy giving half the house to someone else whilst parent 2 is still in it.

Does that make sense?

 

[London Calling]

By the way all - A big caveat here on my posts. These are only my opinions and it does not constitute tax advice or investment planning. Please do not make investment decisions based on my ramblings here. Get a good accountant or financial adviser before making any decisions.

and there's me going to ask you for tax avoidance advice

 

[Buzzer]

But isn't 'common law marriage' a myth and hasn't existed in English law since the 18th century - i.e. how could you include something that doesn't exist?

pass...I'm not a lawyer so dunno. Seems fair though that co-habitees should enjoy the same rights as civil partnerships (surely covered by Human Rights).

I can see the argument from a child of 2 co-habitees taking it to court that they should not be disadvantaged from advantageous tax breaks on the basis that their parents chose not to have a civil ceremony.

My advice...get a good tax specialist.

 

[Barrel of Fun]

No, no, no.

If one parent dies then the other parent can inherit everything tax free irrespective of any thresholds. Transfers between spouses are exempt IN FULL and that's always been the case. (but parent one then has £300k of unused allowance that is wasted). Under new rules that £300k can be used by parent 2 to against their estate increasing their threshold to £600k.

It can be avoided anyway by parent one using all their threshold but lots of people choose not to make a will, or choose to give everything to their spouse or feel uneasy giving half the house to someone else whilst parent 2 is still in it.

Does that make sense?

Ah! Thank you, Buzzer.

I can't believe I ignored the fact that espousal transfers were fully exempt from IHT. I even studied IHT as part of my degree. It must be all that beer abuse OR I have been so keen to undermine Labour that I have been ignoring basic facts.

 

[Alex Alex Dawson oo! oo!]

But isn't 'common law marriage' a myth and hasn't existed in English law since the 18th century - i.e. how could you include something that doesn't exist?

pass...I'm not a lawyer so dunno. Seems fair though that co-habitees should enjoy the same rights as civil partnerships (surely covered by Human Rights).

I can see the argument from a child of 2 co-habitees taking it to court that they should not be disadvantaged from advantageous tax breaks on the basis that their parents chose not to have a civil ceremony.

My advice...get a good tax specialist.

My initial feeling from any child's viewpoint is much the same. However, I guess you'd have to go down the road of totally equalising the 'rights' of married couples (or civil partners) and co-habitees - ie I don't think you could just deal with the IHT situation in isolation.
Notwithstanding the Daily Mail type position on 'Sanctity of Marriage' you referred to earlier, I think there would be a much wider issue here.