Unfortunately the Tories have promised this before and then not followed through .
People mistakenly think that this is a tax break for the weathly .
It’s not
Very weathly people do not pay inheritance tax
They can pay accountants to set up trust funds
More ordinary less weathly people find themslves paying IHT because of the price of houses .
The main asset is their house so they can’t really dispose of it as they need somewhere to live .
The nil rate band is £325k and has not been changed for 12+ years
Whereas the price of houses has soared throughout the country .
Then the tax is outrageous high
Straight in at 40% that is nearly half the value of your estate over £325k
This is outrageous
Many countries ie Australia do not have inheritance tax at all .
I think the nil rate band should be raised to £1million .
Or else the rate reduced or put on a sliding scale
The question is why have they not done this now ?
Dangling a maybe carrot fools no one
Inheritance tax is not only paid by the stupid .
And I have just said the weathy don’t pay it
The very poor don’t pay it
It’s paid by people who can’t afford to give their houses away because they are living in them .
Downsizing isn’t always an alternative .
You could perhaps move to a cheaper property if you can find one .
It might be in a crap area full of drug dealers for example
Or in another part of the country far from their family at a time they most need help or wish to help with their grand children
There aren’t many small houses below £325k in the south of England and the country is levelling up houses have gone up in price all over
They don’t build bungalows any more so bungalows have a premium and not all old people can manage stairs as they get old.
So it’s a stupid statement to say that IHT aid only paid by the stupid
How does peoples dying for want of an ambulance make any difference ?
The NHS a problems are not from lack of funding but because there are too many people in the country ,
Not vast amounts are made from IHT yet it is the most hated of taxes and it is a tax on aspiration .
Why should anyone work for anything if they can’t pass it down to their children ?
And quite honestly I don’t believe NHS staff are all going to feed banks .
I know several people who work for the NHS and they are not all on poverties doorstep
You don’t have to be a screaming radical to be a socialist .
Some socialists seem very good at spending other people money .
I know some think they have it all sorted it so that their property is in their childrens name .
But think again the council is aware of evasion of assets and may come after them if they are needed care home fees even after the statuary 7 years have passed ( you can give away assets as long as you live for 7 years )
You have to look after all the people and the middle of the road people - the people who work hard and pay taxes are getting a bum deal .
Fancy that, worrying about taxation after ones death, Its as bad as those adverts in abundance at the moment who “PROMISE” to actually pay out your Life Assurance Claim after you die, as if you will be able to validate it
It’s the principle of the thing Spitty .
This is a stealth tax on money earned that has already been taxed .
Young people today have a hard enough time with the cost of houses and things in general .
If I can make life easier for my children and grandchildren I would like to do rather that give it to the government to waste on those who have never paid a cent into the system or on grandiose schemes
( Ruanda 140 million down the Swanee )
The Govt also introduced the residence nil-rate allowance of £175k about 6 years ago in responses to rising house prices, in addition to the Inheritance Tax nil-rate allowance.
In practice, a married couple leaving their home to their children or grandchildren can already leave an estate worth up to £1 million without it being liable for Inheritance Tax.
I do agree the whole Inheritance Tax / Gift Tax system needs to be reformed, though.
It’s been tinkered with over the years, with reliefs and exemptions added for some types of assets - and even for certain types of occupations - and it includes too many loopholes for the wealthy to legally avoid it.
There’s been various suggestions for a complete overhaul and reform of the system put forward in recent years but the Govt seem reluctant to grasp the nettle.
One suggestion I’ve seen put forward by several professional groups which have looked into this is -
Get rid of the “7 year rule” which allows people to transfer assets free of tax over their lifetime, abolish the other loopholes (such as “Gifts out of normal expenditure”) and abolish all the “asset type” exemptions from IHT.
Set a reasonable annual limit amount for lifetime gifts (say £30k) and a single tax-free limit for death transfer (say £500,000) then introduce the same flat rate of tax on any lifetime gifts or death transfers over those limits (say 10% instead of 40%)
From the proposals I’ve read, the number-crunchers reckon that this would be a fairer way of collecting roughly the same amount of tax as they collect now but from a larger number of people and it would not just penalise the people whose home is their main asset and have not been able to take advantage of IHT-avoidance planning strategies.
I like that sort of approach. Removing inheritance tax completely will only benefit a small number of people - and people who clearly have a decent size estate to bequeath.
To pay for such a removal means the chancellor will be freezing the tax thresholds for all the various levels of income tax. That is, not applying inflation and wage rises into when the next level up of tax is applied. This will impact millions and especially the lower paid.
Again - favour the already well off and penalise the ordinary folk. All to scrape a few votes next year.
If you have an estate over £325 and you are single or have no children you will have to pay 40 %
( nephews or other relatives are not counted as family )
Properties in some parts of the country are cheaper ie Lincolnshire or Shropshire you perhaps people who live there are not aware of properties elsewhere .
In the village where I live an ex council house is for sale at £400k ( it needs renovation ) this is probably the cheapest property in the village . Sadly the children of the villagers would not be able to afford this .
Where my son lives in berkshire it would cost be around 500k or more
These are bog standard ex council 3 beds .end of terrace .
How can anyone afford these places if they don’t have a leg up from their parents ?
It’s the last thing you can do for your children .
It raises about £7bn a year. This is because it is in fact a very few who pay it. If the value of an estate is primarily from its property then the threshold is £500k not £325k. The 40% is paid on everything above that.
The housing problem in the UK, and I have access to online property sites so I can see the prices everywhere as easily as anyone, is not going to be solved by removing inheritance tax. If you’ve more than one child then splitting a £600k estate is not going to get all of them a house in an expensive area.
Not increasing the income tax thresholds is going to penalise the majority. Is that worth it so that a very few can give their lucky children a leg up? I’d suggest not.
Yes, we were talking about the leg up you want to give your children. So it was absolutely right to quote the £500k figure.
And of course all tax dodges that the rich employ need to be removed. They access such dodges because they can afford to pay expensive advisors. This itself means tax is not equal or fairly applied. But even though there are not that many in this criteria this does reduce the taking from inheritance tax (i.e. it should be much higher).
What data have you found to back up that (empty) claim? In truth it works the other way round. Those who have ended up with a high value estate, and today that it mostly coming from huge increases in property values, do not want their bequeathment to be taxed. These are the voices wanting inheritance tax removed. I’ve not heard anyone put forward that inheritance should be increased or the threshold reduced.
If IHT were applied fairly the super rich would pay it
People who own vast tracts of farmland pay much less .
. Some of Britain’s most wealthy individuals receive monumental tax reliefs for inheritance tax, above the threshold of almost £1 million for couples, which amounts to well over £600 million each year. Overall, the reliefs granted by the government was worth around £1 billion, which would pay for 26,000 NHS nurses, a staggering figure when reflecting on the state of the NHS after ten years of insufficient funding increases and the Covid-19 backlog to overcome. Due to the scale of these reliefs and the ease with which the tax can be avoided, we see the wealthiest estates, those worth over £10 million, pay an effective rate of around 10%, half of what estates worth between £2 million and £3 million pay and far below the intended rate of 40%.
This is why it would make more sense to abolish all those unfair exemptions and reliefs which many very wealthy people take advantage of at the same time as reducing the overall inheritance taxation rate.
Just cutting the inheritance tax % rate or increasing the nil-rate limit by a few hundred thousand will not make it a fair tax unless they get rid of all the unfair loopholes which the super-rich take advantage of.
I doubt any Tory Government would agree to a fair system of inheritance tax, though, because they want to protect themselves and their rich friends and Party Donors and Supporters.
it would add value to the economy to remove it. There are massive transactional costs associated with IHT. Lawyers make a fortune in income of tax avoidance that is not adding any value to the economy. Assets are lost leading to further transactional costs. The administration at the centre, how much does it cost to run the govt depts policing it?
They can’t get rid of the loopholes because the very rich just find new loopholes. Some of the loopholes are also very complex, akin to the situation where nobody in government really understood how some financial instruments worked and this led to the financial crash in 2008 because how can you create laws about money spent goods that don’t even exist yet and likely will never exist etc.
