[Politics] Inheritance Tax

[atomised]

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

because if they are passed down once both parents are deceased to children or grandchildren the threshold becomes 650k

 

[Paulie Gualtieri]

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.

Of course it isn’t, visit a UKG website and it’s all set out clearly and concise.

People are incredibly lazy though

 

[Colonel Mustard]

Of course it isn’t, visit a UKG website and it’s all set out clearly and concise.

People are incredibly lazy though

It's not laziness in the main, it's a fear that it's difficult and complicated. In reality, applying for probate and fulfilling your duty as an executor is easy as long as the estate is straightforward. It's a simple couple of forms to fill in. But it can get complicated if there are unusual.investments, things that can't be turned into cash easily or that may have uncertain values eg works of art, fine wine collections, overseas investments etc. In this case you may want to get legal advice but for most people and estates it's not necessary.

 

[Daddies_Sauce]

because if they are passed down once both parents are deceased to children or grandchildren the threshold becomes 650k

There are two nil-rate bands within IHT. Subject to available reliefs and exemptions, tax is payable to the extent the net value of the estate exceeds these nil-rate bands.

The £325,000 NRB is available to all in respect of their death estate and can be set against all assets. The NRB can also be used:

• to allow individuals to make lifetime chargeable transfers up to £325,000 within a 7-year period without an IHT liability
• in calculating the periodic and exit charges on relevant property trusts

The £175,000 RNRB is available to those passing on a qualifying residence on death to their direct descendants. A taper reduces the amount of the RNRB by £1 for every £2 that the net value of the estate is more than £2 million.

So potentially more than the £650K.

 

[A mex eyecan]

because if they are passed down once both parents are deceased to children or grandchildren the threshold becomes 650k

Once both parents have died and if the property is left to children and or grandchildren the threshold becomes 1M not 650k

 

[atomised]

Once both parents have died and if the property is left to children and or grandchildren the threshold becomes 1M not 650k

helpful thank you. I was aware of the 650k not the additional threshold

 

[A mex eyecan]

helpful thank you. I was aware of the 650k not the additional threshold

each parent gets 325k, but they also get a 175k lifetime property allowance = 500k. One parent leaves that to the other when first dies, when second dies it’s 2 x 500k.

 

[Driver8]

each parent gets 325k, but they also get a 175k lifetime property allowance = 500k. One parent leaves that to the other when first dies, when second dies it’s 2 x 500k.

As long as the property is worth at least £350k, is passed to lineal descendants (children/grandchildren), and the estate is less than £2m.

 

[Eeyore]

Paper airplanes beginning to rain down now. I think the crowd are a little restless. The old seven nil standard not happening.

 

[A mex eyecan]

As long as the property is worth at least £350k, is passed to lineal descendants (children/grandchildren), and the estate is less than £2m.

agree. If the estate is over 2m I believe it reduces the 350k allowance by £1 for every £2 over the 2 million ( i think)

 

[dazzer6666]

Paper airplanes beginning to rain down now. I think the crowd are a little restless. The old seven nil standard not happening.

Are they cheques to HMRC ?

Have told the kids they won’t have an inheritance tax issue when we kick the bucket, as will have spent it all. Best way to avoid IHT is spend it or give it away (early - 7 year rule)

 

[A mex eyecan]

Are they cheques to HMRC ?

Have told the kids they won’t have an inheritance tax issue when we kick the bucket, as will have spent it all. Best way to avoid IHT is spend it or give it away (early - 7 year rule)

yes spend it for sure. A few nice holidays whilst you‘re able, some nice meals out, maybe even a few nice ice creams walking along the prom.

 

[Eeyore]

Are they cheques to HMRC ?

Have told the kids they won’t have an inheritance tax issue when we kick the bucket, as will have spent it all. Best way to avoid IHT is spend it or give it away (early - 7 year rule)

Wrong thread reply.

Actually, wrong thread replies sounds like a Two Ronnies style sketch.

 

[dazzer6666]

yes spend it for sure. A few nice holidays whilst you‘re able, some nice meals out, maybe even a few nice ice creams walking along the prom.

Precisely what we’re doing

Wrong thread reply.

Actually, wrong thread replies sounds like a Two Ronnies style sketch.

Yeah I kind of realised that. Would make for some potentially great reading on here if it became a thing though……

 

[drew]

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 the funniest thing I've read on here today. As Fataddick says, get a new solicitor. That or make sure you see where the tax element is banked and be very suspicious if the solicitor claims it has to go through his books first!!!

 

[Sirnormangall]

We’re not expecting to inherit much because neither sets of parents were particularly wealthy and any estate would likely be significantly reduced through care home fees due to the state of social care. The whole tax and social care system needs an overhaul including a more aggressive approach to tax evasion and benefit fraud.

 

[drew]

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.

If one parent dies and the whole estate passes to the surviving parent then when the second dies, the threshold is double (eg single threshold is currently £325k so double is the £650k you mention). The threshold has been the same since 2010 (when my mum passed away). My dad had died in 1986 when the threshold was only £71k but because he left everything to my mum, the threshold following her death was double the £325k (not £325k + £71k).

As others have suggested, IHT is a good headline but very few estates actually end up paying it.

 

[Colonel Mustard]

Are they cheques to HMRC ?

Have told the kids they won’t have an inheritance tax issue when we kick the bucket, as will have spent it all. Best way to avoid IHT is spend it or give it away (early - 7 year rule)

That’s our aim but my wife (the sensible one) always mentions the possibility of one or both of us having to go into a care home which are phenomenally expensive — more than £1,000 a week on average. For a 10-year stay, that's half a million pounds!!

 

[Westdene Seagull]

Of course it isn’t, visit a UKG website and it’s all set out clearly and concise.

People are incredibly lazy though

More than a sweeping generalisation. My parents estate involved about 7 forms of 20+ pages each and most of the questions I didn't understand a word of. Thankfully a kind NSC'er came to my rescue.

 

[dazzer6666]

That’s our aim but my wife (the sensible one) always mentions the possibility of one or both of us having to go into a care home which are phenomenally expensive — more than £1,000 a week on average. For a 10-year stay, that's half a million pounds!!

Be lucky to find a decent one around here for even a grand a week……just another reason to not have much money left when you get to that state. V easy to protect half your property (from the first to go) so it doesn’t get swallowed up by care home fees.