On a serious note…..most middle income home owners, with only modest homes are now in well in the bracket to pay large amounts of inheritance tax on their deaths. Like the income tax bandings, it needs to be looked at and adjusted
It’s one of the few wealth taxes we have and affects relatively few. The rich avoid it but then under this government tax is basically optional for multi-millionaires anyway. Apparently it creates a £7bn hole so I don’t see how it’s feasible let alone morally correct to get rid.
I actually quite like this as a wealth tax. It redistributes wealth but there are ways round it. 325k is quite low but id rather it lower than higher
Thats part of the problem though Bobby, it’s easily avoidable by the very rich through tax loopholes and trusts. They don’t pay it because they can avoid it. And with the price of property these days, many normal working class people are made to pay tax twice on their estates and there becomes no point in saving. I wish I had an answer but sadly I haven’t….however there has to be a fairer way
It’s easily avoidable by any married couple, who are allowed to combine their £325k tax free limits and their £175k tax free allowance for handing a property to kids or grandkids. That’s a million £ tax free without employing any sleazy accountants, just the rules. But less than 4% of the estates of people who die in the U.K. end up paying any inheritance tax apparently, and it still raises £7 bn a year. The Tories rightly think it’s a popular thing to do, even though most people won’t benefit from it, while cutting the basic rate of income tax by 2p will benefit everyone and cost twice as much. Inheritance tax is unfair in that it taxes income that has been taxed once or twice already, but if we are after equity and equality doing away with it wouldn’t be top of my list, it’s still the richest paying most of that £7bn.
4% ? Really ? I’m probably being stupid here but surely more than that would pay it on their property alone ? I mean, I live in a very modest, 3 bedroom terrace house here and it’s priced at about £425k (vastly over valued in my opinion but I don’t set the price) Might have to talk to you about a few things when we meet up
Doesn’t it seem a bit off though ? NB. Just looked it up. Madly I never knew anything about the main residence nil band that applies to your estate as long as you leave your property to your direct descendants. Seems it’s £175k if I’m reading it correctly. Guess that brings most out of IHT NB Again. I see you already said that. I need to read your posts properly
Not really. £325k threshold for a singleton without property. £500k for a singleton with property and £1m for a couple.
I’m not sure. I think it would to Londoners with massively inflated property prices, less so elsewhere in the country. Plus, as you pointed out, it’s really easy to avoid, or lessen massively. Regardless of tax, the one thing everyone should do to make sense of their personal position is make a will with a decent firm of solicitors. They will advise you if inheritance tax could be an issue and what you can (legally) do about it. Going though the process now with my 83 year old mother in law who is in the early stages of dementia and has never thought about wills. It’s very stressful for (grown up) kids who’s parents haven’t bothered and then they get fragile and vulnerable, and all you want to know is what their wishes are, and know that time is running out…
As above mate…..never knew anything about the £175k nil tax band on property left to the kids (I know you mentioned it) Makes a lot more sense now and to be honest, the IHT £325 rate now looks much more reasonable
There is a point in saving. The way i see it is that its a tax on wealth which i am happier with in principle. Anybody who is receiving an inheritance is already doing well compared to the most who won't or won't fall into the threshold. When has there ever been a rich person who has said theres more tax, i will choose not to earn more. I would much rather tax be taken from these dynasty families who pass on hoards of properties/expensive properties from generation to generation. They get a chunk of change from the property sale and more property gets onto the market. I dont know how trust funds work to by pass all this but I would make it illegal. Imagine if bill gates can pass on his wealth forever and ever, how would that ever be redistributed without an inheritance tax (this wont happen as he will avoid this but it is an example of the principle)
The issue with IHT is that the very wealthy avoid it. I'd like to see them lower the % but close all the loopholes. Raise more revenue that way.
