[Politics] Inheritance Tax

[Bodian]

Mixed feelings on down sizing. But I agree that unearned money should be taxed. IHT seems to have rattled the right-wing cage; I would have thought Tories would be on board with taxing people who receive hand outs?

Not when it affects them obviously....

 

[Herr Tubthumper]

You can be such a tedious troll.

I presume you’re referring to my last point. I think it’s valid. Trust fund kids sits on his arse and does f*** all it’s okay. Working class person sits on their arse they’re demonized.

 

[marcos3263]

I have worked all my life from 18 where I started in a supermarket full time. I am not a high earner and never will be but I have worked hard and am now mortgage free on a house in Portslade worth about £550,000. I go on holiday every other year max and drive a 12 year old car. I don't have a season ticket or go out lots although I do have a comfortable life. - i'm not moaning.

I could have had a nice car on PPE, spent all my money each month and not paid off the mortgage.

So when it comes to nursing homes, inheritance tax etc is it fair that my family will be penalised for my forward thinking and fugility?

I know someone who goes to every gig or festival going, he is always on holiday and has admitted spunking up thousands on coke and gambling. He's in rented and living a cracking life.

Am I the mug? he'll still get looked after when he's old and while has nothing to pass down to his kid he wont get taxed to hell either.

There should be an advantage to living 'correctly' whatever that means. There are people that don't pay the consequences for their actions/lifestyles.

also this stat is scary:

As of June to August 2024, 9.26 million people aged 16-64 in the UK were economically inactive, which is 21.8% of that age group. This is more than 700,000 higher than before the COVID-19 pandemic.

If they were contributing and not taking then we wouldn't be having this debate at all.

 

[Herr Tubthumper]

I have worked all my life from 18 where I started in a supermarket full time. I am not a high earner and never will be but I have worked hard and am now mortgage free on a house in Portslade worth about £550,000. I go on holiday every other year max and drive a 12 year old car. I don't have a season ticket or go out lots although I do have a comfortable life. - i'm not moaning.

I could have had a nice car on PPE, spent all my money each month and not paid off the mortgage.

So when it comes to nursing homes, inheritance tax etc is it fair that my family will be penalised for my forward thinking and fugility?

I know someone who goes to every gig or festival going, he is always on holiday and has admitted spunking up thousands on coke and gambling. He's in rented and living a cracking life.

Am I the mug? he'll still get looked after when he's old and while has nothing to pass down to his kid he wont get taxed to hell either.

There should be an advantage to living 'correctly' whatever that means. There are people that don't pay the consequences for their actions/lifestyles.

also this stat is scary:

As of June to August 2024, 9.26 million people aged 16-64 in the UK were economically inactive, which is 21.8% of that age group. This is more than 700,000 higher than before the COVID-19 pandemic.

If they were contributing and not taking then we wouldn't be having this debate at all.

Think I'm "Team Mate"

 

[Weststander]

I presume you’re referring to my last point. I think it’s valid. Trust fund kids sits on his arse and does f*** all it’s okay. Working class person sits on their arse they’re demonized.

Unless they're ill which would very much include mental illness, if young people simply choose not to work, that shouldn't be paid for by the state.

 

[ATFC Seagull]

I have worked all my life from 18 where I started in a supermarket full time. I am not a high earner and never will be but I have worked hard and am now mortgage free on a house in Portslade worth about £550,000. I go on holiday every other year max and drive a 12 year old car. I don't have a season ticket or go out lots although I do have a comfortable life. - i'm not moaning.

I could have had a nice car on PPE, spent all my money each month and not paid off the mortgage.

So when it comes to nursing homes, inheritance tax etc is it fair that my family will be penalised for my forward thinking and fugility?

I know someone who goes to every gig or festival going, he is always on holiday and has admitted spunking up thousands on coke and gambling. He's in rented and living a cracking life.

Am I the mug? he'll still get looked after when he's old and while has nothing to pass down to his kid he wont get taxed to hell either.

There should be an advantage to living 'correctly' whatever that means. There are people that don't pay the consequences for their actions/lifestyles.

also this stat is scary:

As of June to August 2024, 9.26 million people aged 16-64 in the UK were economically inactive, which is 21.8% of that age group. This is more than 700,000 higher than before the COVID-19 pandemic.

If they were contributing and not taking then we wouldn't be having this debate at all.

Totally empathise with your point but I think your first sentence in bold highlights for me why this is such an issue in terms of equality and social justice.

It is completely impossible for young people to buy a home without generational wealth even in very good salaries. Rather than rewarding those whose parents have been prudent, inheritance simply punishes those whose parents weren't and locks them out of home ownership. Economically this is likely to lead to people behaving like the person you mention who blows all their money, and a massive housing crisis when all of these people hit retirement age and can't pay private rents.

I'm not arguing that heavily taxing inheritance fixes this easily, but all the while that there are enough 20somethings able to put down a £150k deposit from selling granny's flat, then it will continue to push out hardworking people whose granny didn't have one.

 

[loz]

My two sisters and myself were beneficiaries of my dear old mums rather nice house, because it was hers we only got the £37500 + £125000 tax break and had to pay £145000 inheritance tax.

I have no problem with that, the house gained so much from 1954 it’s only fair unearned income is taxed, should be more the richer you are IMHO.

 

[KZNSeagull]

As long as they let me save enough now to enable me to buy a house (200 to 250k) that I can then pass onto my disabled son when I die so that he will not have to go into council run accommodation or similar, then that's fine. 250k will buy a reasonable house up here but not down south so at whatever level this government sets for IHT to kick in, it must be one where they do not increase the potential burden on the state in the future.

 

[Weststander]

Totally empathise with your point but I think your first sentence in bold highlights for me why this is such an issue in terms of equality and social justice.

It is completely impossible for young people to buy a home without generational wealth even in very good salaries. Rather than rewarding those whose parents have been prudent, inheritance simply punishes those whose parents weren't and locks them out of home ownership. Economically this is likely to lead to people behaving like the person you mention who blows all their money, and a massive housing crisis when all of these people hit retirement age and can't pay private rents.

I'm not arguing that heavily taxing inheritance fixes this easily, but all the while that there are enough 20somethings able to put down a £150k deposit from selling granny's flat, then it will continue to push out hardworking people whose granny didn't have one.

That has always been the way, although it would've increased as you describe.

In the 1960 all the way up to 1997 my Dad owned a housing developer's. The subbies he engaged split into two finances camps and it predated Maggie in 1979.

Half got on the housing ladder, jumped the hoops to get a mortgage, only went on overseas holidays when they'd saved up.
The other half on equal income decided to stay in local authority or private landlord housing, paid rent, boozed or holidayed the difference away. A personal choice.

 

[ATFC Seagull]

That has always been the way, although it would've increased as you describe.

In the 1960 all the way up to 1997 my Dad owned a housing developer's. The subbies he engaged split into two finances camps and it predated Maggie in 1979.

Half got on the housing ladder, jumped the hoops to get a mortgage, only went on overseas holidays when they'd saved up.
The other half on equal income decided to stay in local authority or private landlord housing, paid rent, boozed or holidayed the difference away. A personal choice.

Yes but what I'm saying is unless you have a grandparent who owns/owned property, then you don't have the choice anymore to take Option A.

 

[BLOCK F]

I would imagine that many more ‘ordinary’ folk in the south are going to get sucked into IHT liabilities. Many own their own homes and many of those alone are worth 700k plus. So unless they end up in care homes which would eat that money up pretty damn quick then they are very likely to be paying IHT in the future.

The very rich will do what they have always been able to do and will legitimately take steps to pass on their wealth, and as you say, ordinary folk will increasingly get sucked into IHT. I think some on here forget the ever present possibility of having to pay care fees in one’s dotage and this does prevent a number of oldies from planning/passing on assets to the next generation at an earlier stage than they would wish in an ideal world.

Think I'm "Team Mate"

Do you have any children?

 

[Weststander]

Yes but what I'm saying is unless you have a grandparent who owns/owned property, then you don't have the choice anymore to take Option A.

Or, many on nsc including non-Tories admit this, the parents gift the deposits. Others save for deposits but it takes an age.

This is a wider property price explosion issue. Brighton property prices quadrupled in 1997 to 2007 alone. A result of nimbyism restricting supply.

We need Labour to keep their promise on mass housebuilding and at the same time ensure many units are social housing.

 

[sussex_guy2k2]

if you're counting all people might be the case, if you're counting pensioners then their assets are considerably higher. average pension pot is ~250k before adding other savings and property.

the reason only 4% pay it is because of the copious reliefs, exemptions and loopholes, all for good reasons so difficult to withdraw. anyone with a large estate plans for IHT, partly to make life easier for others: the system encourages avoidance. the tax falls largely upon those that didn't plan.

And ultimately, if you have enough cash to be stung by IHT, you’re likely to have a financial advisor anyway.

 

[rippleman]

yes, well as of today. The 1m only comes into play if they leave to children/grandchildren (I think).
But the point I was trying to make, perhaps clumsily, is that there may well be many more people getting sucked into IHT in the south than may have been previously if they are home owners. If they’re buying know at 750k in 15 odd years it will be worth more than that so hence nearer the IHT levels

The potential IHT exemption of £1m is for a married / CP couple who owned their own home. In simple scenario on first death all assets pass to surviving spouse. There is therefore no IHT on the first death so the deceased spouses exemption of £325K and their residence exemption of £175K pass to the surving spouse.

On the second death there are:

2 x £325K and 2 x £175K exemptions = £1m.

On the second death, IHT would only be payable on the value of the assets which exceeded £1m at date of death.

Who the beneficiaries are is not in point when it comes to IHT exemptions.

 

[rippleman]

Or, many on nsc including non-Tories admit this, the parents gift the deposits. Others save for deposits but it takes an age.

This is a wider property price explosion issue. Brighton property prices quadrupled in 1997 to 2007 alone. A result of nimbyism restricting supply.

We need Labour to keep their promise on mass housebuilding and at the same time ensure many units are social housing.

Important point raised here.

Potentially Exempt Transfers or PETs.

Gift the deposit to your kids and it becomes a PET. Outlive the gift by 7 years and the value of the gift falls outside of the Estate when computing IHT.

This link takes you to HMRC briefing note on how gifts can be made, potentially tax free, in order to reduce the value of an Estate:

Work out Inheritance Tax due on gifts

Find out which gifts count towards the value of the estate, how to value them and work out how much Inheritance Tax may be due.

www.gov.uk

https://www.thegazette.co.uk/all-notices/content/104191

 

[Weststander]

The potential IHT exemption of £1m is for a married / CP couple who owned their own home. In simple scenario on first death all assets pass to surviving spouse. There is therefore no IHT on the first death so the deceased spouses exemption of £325K and their residence exemption of £175K pass to the surving spouse.

On the second death there are:

2 x £325K and 2 x £175K exemptions = £1m.

On the second death, IHT would only be payable on the value of the assets which exceeded £1m at date of death.

Who the beneficiaries are is not in point when it comes to IHT exemptions.

People obsess about (it's usually) descendants partly missing out on part of their entitlement due to IHT, it raises blood pressures.

But it isn't the money/wealth of the descendants.

Estates > £1m on the second death, using your example, make an IHT contribution to the public purse. Those descendants still receive life changing huge sums post IHT, it's hard to feel any sympathy.

 

[zefarelly]

My two sisters and myself were beneficiaries of my dear old mums rather nice house, because it was hers we only got the £37500 + £125000 tax break and had to pay £145000 inheritance tax.

I have no problem with that, the house gained so much from 1954 it’s only fair unearned income is taxed, should be more the richer you are IMHO.

My step Dad left my Brother and I a modest house, no IHT,but we both agreed . . . Having to pay anything extra over half a mill is very much a first world problem we would have been happy to live with!

a sliding sale would make more sense . . . . And also perhaps a beneficiaries cap. . . .if you have £1m and 5 kids 200k each is under the threshold . . . 1 beneficiary would have to pay tax On over 200k . . .and a sliding rate like income tax.

This would encourage wealthy people to share . . . . My gran left half her estate to the grandchildren, which gave us all a little boost in our mid 20's. £15k got you on the ladder 25 years ago, although I'd already clambered on.

 

[Machiavelli]

I have worked all my life from 18 where I started in a supermarket full time. I am not a high earner and never will be but I have worked hard and am now mortgage free on a house in Portslade worth about £550,000. I go on holiday every other year max and drive a 12 year old car. I don't have a season ticket or go out lots although I do have a comfortable life. - i'm not moaning.

I could have had a nice car on PPE, spent all my money each month and not paid off the mortgage.

So when it comes to nursing homes, inheritance tax etc is it fair that my family will be penalised for my forward thinking and fugility?

I know someone who goes to every gig or festival going, he is always on holiday and has admitted spunking up thousands on coke and gambling. He's in rented and living a cracking life.

Am I the mug? he'll still get looked after when he's old and while has nothing to pass down to his kid he wont get taxed to hell either.

There should be an advantage to living 'correctly' whatever that means. There are people that don't pay the consequences for their actions/lifestyles.

also this stat is scary:

As of June to August 2024, 9.26 million people aged 16-64 in the UK were economically inactive, which is 21.8% of that age group. This is more than 700,000 higher than before the COVID-19 pandemic.

If they were contributing and not taking then we wouldn't be having this debate at all.

Given what you've divulged, it's unlikely your estate will be charged IHT so not sure why you're posting in this thread. And if that isn't the case and you have got significant money to spare, spend a decent sum of it and enjoy life. Doing that might actually help the UK economy, which draws your (admittedly qualified) 'correct' way of living into question.

 

[BLOCK F]

I have worked all my life from 18 where I started in a supermarket full time. I am not a high earner and never will be but I have worked hard and am now mortgage free on a house in Portslade worth about £550,000. I go on holiday every other year max and drive a 12 year old car. I don't have a season ticket or go out lots although I do have a comfortable life. - i'm not moaning.

I could have had a nice car on PPE, spent all my money each month and not paid off the mortgage.

So when it comes to nursing homes, inheritance tax etc is it fair that my family will be penalised for my forward thinking and fugility?

I know someone who goes to every gig or festival going, he is always on holiday and has admitted spunking up thousands on coke and gambling. He's in rented and living a cracking life.

Am I the mug? he'll still get looked after when he's old and while has nothing to pass down to his kid he wont get taxed to hell either.

There should be an advantage to living 'correctly' whatever that means. There are people that don't pay the consequences for their actions/lifestyles.

also this stat is scary:

As of June to August 2024, 9.26 million people aged 16-64 in the UK were economically inactive, which is 21.8% of that age group. This is more than 700,000 higher than before the COVID-19 pandemic.

If they were contributing and not taking then we wouldn't be having this debate at all.

I don’t trust politicians who are dumb enough to handle the WFP allowance as cack handedly as Reeves and Starmer did, to do much that is sensible and thoroughly thought through, rather than follow their ‘ideological instincts’.
We don’t know for sure what they will come up in the budget, but I would put money on the possibility that it won’t be encouraging for those who live life like yourself as opposed to your spendthrift acquaintance.
As for boosting growth in the economy and being business friendly, I’m not holding my breath.
My sister and brother in law have adopted the attitude of your spendthrift fellow, but my wife and I just don’t think or act like that. As you say, ‘who are the mugs?’
I hope I am wrong re the terrible two. We shall begin to find out very shortly.

 

[Herr Tubthumper]

Do you have any children?

What does this have to do with anything?