[Politics] Inheritance Tax

[Professor Plum]

Keeping 55% of what you’ve earned feels fair.

Depends who you ask.

 

[Weststander]

Depends who you ask.

Paging Magic Grandpa in Islington North.

 

[dsr-burnley]

IHT avoidance.

And second homes are subject to CGT. I saw a wealthy individual pass his second home to his son. HMRC caught him out after noting it from Land Registry data. CGT bill and penalties.

Few of us would disagree in first principles with tax avoidance. That's legal, and starts when you take out an ISA.

What this bloke was doing was tax evasion, which is illegal, and changing the law to tax beneficiaries rather than testators on death would not make any difference to this particular fraud. It would still be illegal and he would presumably still have done it.

 

[Weststander]

Few of us would disagree in first principles with tax avoidance. That's legal, and starts when you take out an ISA.

What this bloke was doing was tax evasion, which is illegal, and changing the law to tax beneficiaries rather than testators on death would not make any difference to this particular fraud. It would still be illegal and he would presumably still have done it.

Avoidance used to be a wholly clean or accepted term. Less so in society and in law now eg the DOTAS regime. The abuse went too far, both Labour and Tory governments had enough.

IHT avoidance. I’ve seen elderly parents swapping homes with the next gen (the older couple leaving a valuable place), an elderly woman gifting her £600k home to her great niece. I’m not a solicitor. When it comes to a death 4, 5 or 10 years later are these on the radar or questions of an estates solicitor, on the form?

 

[Driver8]

Avoidance used to be a wholly clean or accepted term. Less so in society and in law now eg the DOTAS regime. The abuse went too far, both Labour and Tory governments had enough.

IHT avoidance. I’ve seen elderly parents swapping homes with the next gen (the older couple leaving a valuable place), an elderly woman gifting her £600k home to her great niece. I’m not a solicitor. When it comes to a death 4, 5 or 10 years later are these on the radar or questions of an estates solicitor, on the form?

Gifting your home is fine and legit and if done more than seven years before death can remove it from the estate. Their is a big but however, if you carry on living in that home you must pay a commercial rent to the new owner which is taxable to them as income. If rent isn’t paid the gifting is ignored and the house is back in the estate.

 

[Triggaaar]

IHT avoidance. I’ve seen elderly parents swapping homes with the next gen (the older couple leaving a valuable place), an elderly woman gifting her £600k home to her great niece. I’m not a solicitor. When it comes to a death 4, 5 or 10 years later are these on the radar or questions of an estates solicitor, on the form?

If someone gifts their £600k home, 7 years or more before death, why would it be on the form or on the solicitor's radar?

 

[RandyWanger]

Is Charlie going to caugh up? How about backdating and charging Hugh Grosvenor?

 

[dazzer6666]

If someone gifts their £600k home, 7 years or more before death, why would it be on the form or on the solicitor's radar?

Would have to ask the questions about commercial rent/bills etc to ensure the gift fell within the 7 year rule.

 

[Paulie Gualtieri]

I don’t think expert advice is required with the life assurance issues mentioned above.

Simply ask the life company for the form to put the life assurance policy in trust. Their forms are incredibly simple.

In practical terms, following death the payout is made fairly swiftly directly to the stated beneficiary. Tax-free and not part of the estate.

L&G made this option to me quite prominently in their literature and it makes total sense, giving the survivor total control of the funds relatively quick as well

 

[Paulie Gualtieri]

Gifting your home is fine and legit and if done more than seven years before death can remove it from the estate. Their is a big but however, if you carry on living in that home you must pay a commercial rent to the new owner which is taxable to them as income. If rent isn’t paid the gifting is ignored and the house is back in the estate.

Exactly, you have to at least present an argument that the sale was at arms length if you plan to continue living there.

 

[Weststander]

Regarding PET’s and gifting of the main home, they’re eliminating IHT. I wonder if Reeves will remove the PET’s option?

 

[nicko31]

There are gonna be changes and more will pay IHT.

Even less pay IHT than go to private school but I expect a lot of bedwetting if it happens

Inheritance tax increases expected for some in Budget

It is not known how many people are likely to end up paying more under the government's plan.

www.bbc.co.uk

 

[Weststander]

There are gonna be changes and more will pay IHT.

Even less pay IHT than go to private school but I expect a lot of bedwetting if it happens

Inheritance tax increases expected for some in Budget

It is not known how many people are likely to end up paying more under the government's plan.

www.bbc.co.uk

My view is a straight £750k threshold and do away with almost all the other reliefs. But keep Agricultural Property Relief and genuine Business Property Relief for economic and expertise stability reasons. So ending a range of copouts and the effective £1m threshold.

But it won’t be a game changer. The biggest thing is gifts made throughout a life. People worth £3m, £30m, £300m don’t pay IHT. Assets pass to kids and grandkids many years before eg cash. How to crack that? A supercomputer monitoring the worldwide assets of 68m folk throughout their lives is a non starter.

 

[timbha]

My view is a straight £750k threshold and do away with almost all the other reliefs. But keep Agricultural Property Relief and genuine Business Property Relief for economic and expertise stability reasons. So ending a range of copouts and the effective £1m threshold.

But it won’t be a game changer. The biggest thing is gifts made throughout a life. People worth £3m, £30m, £300m don’t pay IHT. Assets pass to kids and grandkids many years before eg cash. How to crack that? A supercomputer monitoring the worldwide assets of 68m folk throughout their lives is a non starter.

Is that £750k per person or per couple? Or as it is now where on death person A can pass their allowance to person B.
It’s started to get complicated already! What if it’s just a property?
This and the euthanasia debate could make things messy!

 

[dazzer6666]

My view is a straight £750k threshold and do away with almost all the other reliefs. But keep Agricultural Property Relief and genuine Business Property Relief for economic and expertise stability reasons. So ending a range of copouts and the effective £1m threshold.

But it won’t be a game changer. The biggest thing is gifts made throughout a life. People worth £3m, £30m, £300m don’t pay IHT. Assets pass to kids and grandkids many years before eg cash. How to crack that? A supercomputer monitoring the worldwide assets of 68m folk throughout their lives is a non starter.

I'm also struggling to see how they can effectively administer/collect taking into account gifts made and the 7 year rule etc however they fiddle with it.

Think it's more likely to be reduction in the overall threshold on death (plus an increase in the rate perhaps) as this is easier to collect. It's more of a political statement than a fundraiser though.

 

[sparkie]

I'm a bit scared of this as my only route back to owning a property after losing everything a few years ago was via an inheritance. I hope Reeves leaves me enough to buy a studio flat.

Still, no point in worrying until the details of this Sword of Damocles doom are revealed.

 

[CoolTed]

I'm also struggling to see how they can effectively administer/collect taking into account gifts made and the 7 year rule etc however they fiddle with it.

I understand that, currently, the Executor has the responsibility to identify any gifts within the last seven years. That's why it's important for all gifts to be documented, with details left with the Will.

 

[Is it PotG?]

There are gonna be changes and more will pay IHT.

Even less pay IHT than go to private school but I expect a lot of bedwetting if it happens

Inheritance tax increases expected for some in Budget

It is not known how many people are likely to end up paying more under the government's plan.

www.bbc.co.uk

This cabal really know how to motivate folks to do well and save a few quid.

 

[BrightonCottager]

There was an article in Private Eye a few issues ago about the huge amounts of IHT avoided by rich people buying agricultural land as that is exempt from IHT, which has led to significant increases in land values.

It would seem more equitable to target active tax avoidance schemes like that before people (yes, me included if my mum's care home fees don't use it up first) whose parents bought their house decades ago.

 

[RandyWanger]

But it won’t be a game changer. The biggest thing is gifts made throughout a life. People worth £3m, £30m, £300m don’t pay IHT. Assets pass to kids and grandkids many years before eg cash. How to crack that? A supercomputer monitoring the worldwide assets of 68m folk throughout their lives is a non starter.

Transactions via a distributed ledger on a blockchain no doubt. CBDC.