Inheritance Tax

[Hertsscot]

Gideon wooing the Mail, Telegraph and Express by raising level before paying inheritance tax to £1 million. Not exactly the most progressive of taxes but hey it will benefit the wealthiest 5% so that's all that matters.

[euan2020]

Most wealthy people can avoid this. So only really stupid people it penalses which u could argue is unfair. At minute u can have situations where children of stubborn parents having to sell fily assets like houses to pay tax bill, because never made will. Or car crash patents killed life insurance pays out and kids have to pay inheritance tax.

[Bzzzz]

Easy answer, as soon as you become old enough to die you should sign all your assets to your youngest child.

[phart]

you can die at any age, there is no lower limit on dying Bzzzz

[euan2020]

Easy answer, as soon as you become old enough to die you should sign all your assets to your youngest child.

As I said its a tax on uneducated. + some people would not consider life insurance payiing out on hose +. Inherited assets. Lot of people don't want to consider death. In ur example it could be the youngest child that is killed in a car accident and parents have to sell family assets to pay their current inheritance tax. Due to house price inflation lot of houses take u near limit now

[Pool Q]

Dead people don't pay taxes. Inheritance Tax is a tax un unearned income.

[Scunnered]

Dead people don't pay taxes. Inheritance Tax is a tax un unearned income.

They vote if some paranoid chaps and chapettes are to be believed...

[phart]

Tax is a tax un unearned income.

I wish they would tax "unearned" income across the board

[Kirk]

Dead people don't pay taxes. Inheritance Tax is a tax un unearned income.

Which is bullshit as its earned by the person leaving it.

[Pool Q]

Which is bullshit as its earned by the person leaving it.

Indeed. Which is why it is unearned for anyone inheriting it.

[euan2020]

Indeed. Which is why it is unearned for anyone inheriting it.

its not an income though, inheritance, transfer of assets/cash but not an income

Estate (in the UK ) pays, not the beneficiary

So while the dead person does not pay the tax, his estate does

[Pool Q]

It is a form of income for the recipients though, anyone not wishing to pay tax on it doesn't have to inherit anything. I accept absolutely that allowances have to be made for family circumstances to some extent. Those with a longer memory may recall a thread on this from years back when Calmac Man went off on one and said there should be no Inheritance Tax threshold at all. At the time I think I argued for a threshold of about £500k (it's marginal of course, nothing below that) and I'd still say that is about right, although property prices in SE England and a few other places do distort things. And that's before any consideration is given as to how easy it is given to avoid.

[Hertsscot]

The problem is that the bulk of that estate may well be property. In some places house prices have rocketed and so the inheritance is not necessarily due to the hard work of the deceased but a property boom in which they were fortunate participants. Indeed a housing boom in one area may be brought about due to subsidisation by other taxpayers from less prosperous areas, for instance by the government improving transport links. The fact is that this will surely only benefit those who are better off in the UK and that is so wrong at a time when the government is cutting benefits to some of the most vulnerable within society.

[euan2020]

anyone wanting some morbid fun for a saturday night

here's a list of 15,000 unclaimed estate's in England & Wales - around 200 were born in Scotland

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/441581/UnclaimedEstatesList.csv

[euan2020]

The problem is that the bulk of that estate may well be property. In some places house prices have rocketed and so the inheritance is not necessarily due to the hard work of the deceased but a property boom in which they were fortunate participants. Indeed a housing boom in one area may be brought about due to subsidisation by other taxpayers from less prosperous areas, for instance by the government improving transport links. The fact is that this will surely only benefit those who are better off in the UK and that is so wrong at a time when the government is cutting benefits to some of the most vulnerable within society.

true - but a lot of folk aberdeen way are now paying £250K for an average house, add on some savings between 2 people etc etc and not hard to get to the limit

there are lots of dancese to avoid paying inheritance tax, or dont even need to dance - ie when my father passed, agrucultural land is exempt from inherirance tax (with some caveats )

[Rossy]

'Tory introduces Tory policy which benefits richer Tory voters'.

Unfortunately, no shock there.

I think though it's nice of Gideon to take time out of his war on non-Tory voters the poor, the unprivileged and the unfortunate, by introducing this delightful benefit for all upper middle class, comfortably well-off everywhere.

The qkunt.

[Kirk]

Indeed. Which is why it is unearned for anyone inheriting it.

But the person who earned it has papped it and left it to someone else to enjoy. Why then should it be taxed? It was taxed when they earned it in theory.

[Pool Q]

But the person who earned it has papped it and left it to someone else to enjoy. Why then should it be taxed? It was taxed when they earned it in theory.

in the case of the appreciation of the the value of a house, normally a large chunk of an estate, it hasn't been. In the case of money, tax was presumably paid by the person leaving it when it was earned. Later, usually many years later, perhaps decades, the beneficiary then gets a sum of money which they never earned and (effectively) pays tax at that point. As I said earlier I think the threshold should be raised so as not penalise normal working folk, and people with real money will pay someone to avoid most of it anyway, it's not that difficult, but in principle I think taxing large sums of unearned income is right.

[Kirk]

in the case of the appreciation of the the value of a house, normally a large chunk of an estate, it hasn't been. In the case of money, tax was presumably paid by the person leaving it when it was earned. Later, usually many years later, perhaps decades, the beneficiary then gets a sum of money which they never earned and (effectively) pays tax at that point. As I said earlier I think the threshold should be raised so as not penalise normal working folk, and people with real money will pay someone to avoid most of it anyway, it's not that difficult, but in principle I think taxing large sums of unearned income is right.

But it is earned. It doesnt matter who earned it, when i get paid i pay tax, if i then want to give all my money to someone they shouldnt have to be taxed to receive it. The tax is paid already. We obviously have different views on it.

If im missing something obvious please tell me. (A brain is not a suitable answer)

[fishcumnock]

You pay tax on used car parts ,this should be banned!

[Pool Q]

But it is earned. It doesnt matter who earned it, when i get paid i pay tax, if i then want to give all my money to someone they shouldnt have to be taxed to receive it. The tax is paid already. We obviously have different views on it.

If im missing something obvious please tell me. (A brain is not a suitable answer)

[euan2020]

Only around 33000 people currently pay iht. As I said its a tax on uneducated or the unfortunate.

I sure as feck will never find myself paying it. Currently pointing my mate in correct direction cos he has £500k spare. Ordinary guy who ended up in oil industry who was a carpenter and built his own house.

[Pool Q]

But it is earned. It doesnt matter who earned it, when i get paid i pay tax, if i then want to give all my money to someone they shouldnt have to be taxed to receive it. The tax is paid already. We obviously have different views on it.

If im missing something obvious please tell me. (A brain is not a suitable answer)

Sorry about that earlier, problems with my phone. I take your point, and I can see the objection against the same income being taxed twice (that ignores appreciation in property which is the bulk of most estates now, but leave that to one side). The fact is though that taxation relates to the individual and when someone inherits from an estate it is effectively deemed to be new income for them at that point. You may disagree with this, but it is a simple reality. Myself I think it is fair enough IF a reasonable allowance is made for the first slice of any inheritance. At the moment it is £325k (£650k for a couple) which I feel could reasonably be raised to £500k for an individual. As it happens, this is one of those issues where I find myself almost agreeing with Gideon, many would argue against any allowance. I take it you know that gifts (including cash) in excess of £3000pa are also taxable, subject to the seven year rule?

I helped my parents out with all of this about 10 years ago, it really isn't difficult to structure things so that no inheritance tax is payable unless you are talking massive sums. My father-in-law is a retired accountant and management consultant and he has organised things, entirely within the rules, in such a way that his two children will end up paying virtually no tax on his estate of over £2m including a muckle big house in Ravelston. I've also started looking into this in Spain as we have a property there, and that is proving a bit more of a challenge.

Edited July 5, 2015 by Pool Q

[Orraloon]

But it is earned. It doesnt matter who earned it, when i get paid i pay tax, if i then want to give all my money to someone they shouldnt have to be taxed to receive it. The tax is paid already. We obviously have different views on it.

If im missing something obvious please tell me. (A brain is not a suitable answer)

Most of your money will be taxed twice. You pay income tax when you earn it ( and NI, don't forget NI, it's quite a lot these days). But you also get taxed again when you spend it, unless you only spend money on zero VAT rated items and stuff with no duty on it, which is probably very unlikely.

[Kirk]

Sorry about that earlier, problems with my phone. I take your point, and I can see the objection against the same income being taxed twice (that ignores appreciation in property which is the bulk of most estates now, but leave that to one side). The fact is though that taxation relates to the individual and when someone inherits from an estate it is effectively deemed to be new income for them at that point. You may disagree with this, but it is a simple reality. Myself I think it is fair enough IF a reasonable allowance is made for the first slice of any inheritance. At the moment it is £325k (£650k for a couple) which I feel could reasonably be raised to £500k for an individual. As it happens, this is one of those issues where I find myself almost agreeing with Gideon, many would argue against any allowance. I take it you know that gifts (including cash) in excess of £3000pa are also taxable, subject to the seven year rule?

I helped my parents out with all of this about 10 years ago, it really isn't difficult to structure things so that no inheritance tax is payable unless you are talking massive sums. My father-in-law is a retired accountant and management consultant and he has organised things, entirely within the rules, in such a way that his two children will end up paying virtually no tax on his estate of over £2m including a muckle big house in Ravelston. I've also started looking into this in Spain as we have a property there, and that is proving a bit more of a challenge.

Yeah I get all that, I guess I'm just trying to look at it in a very simplistic way. As long as it can be avoided within the rules I guess its OK. I'll worry about it when I need to haha.

Most of your money will be taxed twice. You pay income tax when you earn it ( and NI, don't forget NI, it's quite a lot these days). But you also get taxed again when you spend it, unless you only spend money on zero VAT rated items and stuff with no duty on it, which is probably very unlikely.

Yea I suppose that's true too.