[Politics] Inheritance Tax

[HeaviestTed]

How do we replace the lost billions coming into the public purse?

I was thinking about this separately this morning - the coffers can’t be looking too bad - everything is more expensive so more to be taken in vat, wages have risen so more to be taken from paye etc, houses are still going up so more in stamp duty.

Has the high inflation actually helped the government?

 

[Weststander]

That's tosh. I don't know where they got that from. Also there are unused allowances. My parents estate had a £650k inheritance tax allowance on it. BBC says only 4% of folk end up paying it.

The mean average IHT bill was £213,000, so not hitting the rich.

The numbers hit will rise sharply over time, until now in this property wealth era, assets have been transferred to surviving spouses/CP's at £15.7b per annum.

 

[Highfields Seagull]

All this bollocks about it being a tax on the dead too. It isn't - it is a tax on the unearned wealth coming to the beneficiaries - and with pretty high thresholds so that most 'normal' people won't pay any. Usual tory policy of tax cuts for the better-off.

 

[atomised]

That's tosh. I don't know where they got that from. Also there are unused allowances. My parents estate had a £650k inheritance tax allowance on it. BBC says only 4% of folk end up paying it. And, let's face it, if you end up paying it that's some sizeable wad of cash you're sitting on there.

As regards 'envy tax' in other comments. I don't agree. It's luck of the draw tax. Had I qualified, I would have happily paid my share

that has been my point throughout the other executor whilst not a beneficiary has been dealing with a lot of it and got confused I think. by my calculations my parents estate has the 650k you refer to

 

[Eeyore]

that has been my point throughout the other executor whilst not a beneficiary has been dealing with a lot of it and got confused I think. by my calculations my parents estate has the 650k you refer to

Definitely. You have the £325k but a good solicitor make sure you get the full additional allowance if applicable.

When I settled my parent's estate I made sure a solicitor dealt with the forms and the inheritance tax and did all the other leg work myself. The solicitor will know what you can have. So it's money well spent.

 

[Bodian]

The Query

Odd decision as I think I read that only 6% pay it and if you do pay it then you've inherited a pretty large sum. The first £300 odd grand is tax free and even then allowances can be transferred to increase it.

The Answer

Another Tory policy to enrich the rich further, Hunt is just like the others, a snake in the grass allowing his rich fellows to dine at the same trough

I don't get this from a political point of view.

So 6% will pay it. Those 6% were likely to vote tory anyway.

The people that the tories need to convince if they are to have any hope at the next election are the red wall lot, Workington man blah blah.

I get there is a wider consituency of people who will never pay it but incorrectly fear they will pay it. But again, there's not too many floating voters here.

So is this more about holding the party together? Sunak is saying, "OK, I sacked Suella and appointed Cameron, please 1922 committee, please don't boot me out before the election, look here's some red meat for you"

No - it's about passing things to benefit their mates and themselves whilst they still have a chance to before they get kicked out. They are doing as much as they can that will take time to undo again.

 

[Machiavelli]

I don't get this from a political point of view.

So 6% will pay it. Those 6% were likely to vote tory anyway.

The people that the tories need to convince if they are to have any hope at the next election are the red wall lot, Workington man blah blah.

I get there is a wider consituency of people who will never pay it but incorrectly fear they will pay it. But again, there's not too many floating voters here.

So is this more about holding the party together? Sunak is saying, "OK, I sacked Suella and appointed Cameron, please 1922 committee, please don't boot me out before the election, look here's some red meat for you"

Worth adding that a few years back (so probably still applies), the Tories got more income from the dead than the living, so they might just be looking to boost their party coffers.

 

[highflyer]

The Query


The Answer




No - it's about passing things to benefit their mates and themselves whilst they still have a chance to before they get kicked out. They are doing as much as they can that will take time to undo again.

Remember that, in broader terms, the Tories are very happy for the public purse to empy and for public services to crumble. It doesn't affect them or many of their voters so much and allows them to argue against bringing privatized services back into public ownership and argue for opening up new areas (eg health) for privatization.

 

[nicko31]

I was thinking about this separately this morning - the coffers can’t be looking too bad - everything is more expensive so more to be taken in vat, wages have risen so more to be taken from paye etc, houses are still going up so more in stamp duty.

Has the high inflation actually helped the government?

Inflation is handy for governments to inflate away their debt and boy this lot have piled on the debt in the last 13 years.

The coffers are in shocking state, the cost of higher interest rates on government debt are only just getting going.

We need all the tax take we can. Giving away IHT makes no sense and won’t help grow the economy. But I don’t think this lot give a f&&k, one more handout to those you don’t need it. They know they’re finished

 

[Westdene Seagull]

How do we replace the lost billions coming into the public purse?

The increase of CGT from 19% to 25% will cover it but if you want extra - tax people and companies on their overseas income like the States do. Should screw Amazon right royally.

 

[Colonel Mustard]

that has been my point throughout the other executor whilst not a beneficiary has been dealing with a lot of it and got confused I think. by my calculations my parents estate has the 650k you refer to

The forms you fill in as executor will step you through the process including allowances. If both parents are deceased the threshold rises to £650k and if there’s a property bequeathed to direct descendants it rises to, I believe £1m. IHT is 40% levied on any balance of the estate ABOVE these figures. I did my parents' paperwork after they died without using a solicitor as it was pretty straightforward — property value, bank accounts, ISAs, Premium Bonds etc. and it was well below £650K in any case. If there are any complexities regarding bequests, charities etc., you might want to use a solicitor but ordinarily it’s easy enough to do yourself.

 

[Westdene Seagull]

the threshold is 325k but should an estate be worth 326k you're liable to inheritance tax on the lot so the solicitor dealing with an estate I stand to inherit says

That's utter rubbish - not true at all.

 

[Colonel Mustard]

Worth adding that a few years back (so probably still applies), the Tories got more income from the dead than the living, so they might just be looking to boost their party coffers.

Well I don’t know. Are political donations classed as tax exempt, like charities? If so, political donations are used to avoid IHT. If IHT is abolished or reduced, there’s less incentive to make those donations, I’d have thought?

 

[Pavilionaire]

1. Getting rid of Inheritance Tax is nothing more than a tax cut for the rich.

2. Corporation Tax has only just gone up from 19% to 25% so cutting it now wouldn't make sense - it would confirm muddled thinking and lack of a plan. As for "full expensing" as an accountant I cringe at this terminology because is is misleading, as it implies you can write off an asset against income like a telephone bill or stationery which you can't. Just still with '100% tax deduction'.

3. The top rate of Capital Gains Tax on non-residential property is 20%, and at a time when other taxes are high that is shockingly low. A millionaire makes a gain on some investment shares and pays a top rate of 20% on the gain. Meanwhile, Joe Public gets a modest bonus and pays 32% income tax and Class 1 NI on it.

Whatever Hunt does, you can guarantee the last to lose out will be the rich and / or the elderly.

 

[atomised]

The forms you fill in as beneficiary will step you through the process including allowances. If both parents are deceased the threshold rises to £650k and if there’s a property bequeathed to direct descendants it rises to, I believe £1m. IHT is 40% levied on any balance of the estate ABOVE these figures. I did my parents' paperwork after they died without using a solicitor as it was pretty straightforward — property value, bank accounts, ISAs, Premium Bonds etc. and it was well below £650K in any case. If there are any complexities regarding bequests, charities etc., you might want to use a solicitor but ordinarily it’s easy enough to do yourself.

thanks for that. I wasn't keen on using solicitor but my uncle started the process while I was away. I believe the properties value is around 600k and other assets around 40k so should be trouble free

 

[nicko31]

Will this win the Tories any votes? Hardly one for the red wall …

 

[Paulie Gualtieri]

Was just going to post the same. Also note:

'most married couples can leave up to £1 million to their children tax-free. Inheritance tax is only paid at 40% on assets and wealth above £1 million – and even then loopholes can mean that for some families no tax is paid on assets worth over £1 million.

The IFS has estimated that the wealthiest 1% would get half the benefit of scrapping inheritance tax, with an average tax cut of £1 million'

The main problem with the debate on inheritance tax is disinformation.

The gap between the number of people that think they would pay inheritance tax and those that acually would is large. TUC polling reveals that 'a sizable 32% of the public who expect to benefit from inheritance think they will have to pay inheritance tax – significantly higher than the 4% of estates that do'.

The same polling indicates gerenral public support for keeping, or raixing the tax, though you'd never know that from reading the tabloids (and telegraph).

here the link to the TUC polling:

Clear majority want to keep inheritance tax at current level or raise it – new TUC polling finds

A clear majority (60%) of the public are against cuts to the £1 million inheritance tax threshold – while just 2 in 10 said they wanted the tax lowered, according to new polling published by the TUC today (Thursday).

www.tuc.org.uk

I cannot imagine why the very rich owners of our main media outlets are so keen to spread disinformation and stir up oppoistion to inheritance tax...

This, it’s a voter winner as many of the middle classes of an age will think it will affect them, when it won’t

 

[Colonel Mustard]

The forms you fill in as beneficiary will step you through the process including allowances. If both parents are deceased the threshold rises to £650k and if there’s a property bequeathed to direct descendants it rises to, I believe £1m. IHT is 40% levied on any balance of the estate ABOVE these figures. I did my parents' paperwork after they died without using a solicitor as it was pretty straightforward — property value, bank accounts, ISAs, Premium Bonds etc. and it was well below £650K in any case. If there are any complexities regarding bequests, charities etc., you might want to use a solicitor but ordinarily it’s easy enough to do yourself.

Sorry, I meant executor, not beneficiary.

 

[chrisg]

Most privately owned 3 bed houses upwards are worth 325000 or more , so not sure how only 6% pay it

 

[BLOCK F]

This, it’s a voter winner as many of the middle classes of an age will think it will affect them, when it won’t

Well, if they are confused or uncertain, they only have to do some of their own research or consult a solicitor or an accountant. It isn’t difficult.