Inheritance Tax Question

dowie said:
IHT on the other hand - well you're dead when it comes into effect, its aim is to stop large chunks of wealth from being perpetually handed down - I'm really not seeing the unfair aspect. So far you've just pointed out that tax has already been paid earlier down the line - but that is the case with tax in general...
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the limits though have been massively skewed by significantly higher house prices.
 
Isn't it odd that people are happy for the rich to pay more taxes unless its them getting a large amount of free money then all of a sudden its not fair
 
Bear said:
Isn't it odd that people are happy for the rich to pay more taxes unless its them getting a large amount of free money then all of a sudden its not fair
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It's not really the same is it. Assume you're talking about income tax vs inheritance.
 
Rossi~ said:
It's not really the same is it. Assume you're talking about income tax vs inheritance.
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Im talking about taxation in general but in your case its even worse. On one side you have tax taken from someones earnings which they have worked for, and on the other, people are whining about taxation on free money they did nothing to earn.
 
Bear said:
Im talking about taxation in general but in your case its even worse. On one side you have tax taken from someones earnings which they have worked for, and on the other, people are whining about taxation on free money they did nothing to earn.
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But it's their family's money, the government should have no claims to it, and as I said before, if I was in such a situation, everything I could keep in cash would be kept in cash and not declared as being given away.
 
spoffle said:
But it's their family's money, the government should have no claims to it, and as I said before, if I was in such a situation, everything I could keep in cash would be kept in cash and not declared as being given away.
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No it's your parents money. If and when they pass away and they have given you the money, then it would amount to being taxed on unearned income pretty much like any other time outside of a tax free environment like an ISA only you have an allowance of over £300k.
 
Bear said:
No it's your parents money. If and when they pass away and they have given you the money, then it would amount to being taxed on unearned income pretty much like any other time outside of a tax free environment like an ISA only you have an allowance of over £300k.
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Parents are family...

I am aware how it works. I'm stating that if I were in the position of leaving family a lot of money, I'd do it in cash and not declare it.
 
spoffle said:
Parents are family...

I am aware how it works. I'm stating that if I were in the position of leaving family a lot of money, I'd do it in cash and not declare it.
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It would be pretty hard to withdraw £325k in cash and no one notice even if you did it chunks at a time and a God help you if you ever had a fire at your home :confused:
 
Aside from the impracticalities of keeping vast amounts of cash around the house that are simply too numerous to be worth mentioning, it isn't simple to possible to withdraw large amounts of money and give it away.

On death, your accounts can (and will, for larger estates) be checked for the transaction history. If large withdrawals cannot be traced (showing up in other accounts, no equivalent asset purchased) then they'll be treated as gifts and the nil rate band will be reduced by that amount.
 
The_Abyss said:
Aside from the impracticalities of keeping vast amounts of cash around the house that are simply too numerous to be worth mentioning, it isn't simple to possible to withdraw large amounts of money and give it away.

On death, your accounts can (and will, for larger estates) be checked for the transaction history. If large withdrawals cannot be traced (showing up in other accounts, no equivalent asset purchased) then they'll be treated as gifts and the nil rate band will be reduced by that amount.
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The issue would be who to trace it to, though. Additionally cash doesn't take up that much space and I'd sooner trust a hidden safe room than a bank if I had the wealth to justify it.
 
You simply cannot withdraw that much money without attracting attention. The moment you even try, your bank manager would want a chat.

If you withdrew that much over 6 months, you would be audited.
 
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