inheritance tax experts?

jamief said:
Do many working class folk have estates valued at over £325000 then?
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Remember property is not liquid cash and down south is very different.

My neighbour is a sparky that works 6am-8pm. Over the road is a mechanic. He gets up and goes and fixes cars all day.

Two doors down is a postie.

The other way there's a lady who has worked as a receptionist for longer than i've been alive....and these are just the few I happen to know about.

Their houses are worth at least 600k each. They're not big houses, they're not in the middle of London (zone 4) and they're not fancy. These people are not cash rich. They will get hit by IHT.

The right target for the division of wealth or the kind of people that should be supported in the accumulation of wealth?
 
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Vanilla said:
Their houses are worth at least 600k each. They're not big houses, they're not in the middle of London (zone 6) and they're not fancy. These people are not cash rich. They will get hit by IHT.

The right target for the division of wealth?
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The parents made a load of tax free money through no effort on their part due to the massive property spike since the 80s and the children object to paying a relatively small amount of tax?

IHT is there to increase social mobility by reducing the concentration of wealth. Do you want to live in a country that returns to the dark days of the late 19th century when a few hundred people controlling 90% of the land?
 
momentimori said:
The parents made a load of tax free money through no effort on their part due to the massive property spike since the 80s and the children object to paying a relatively small amount of tax?
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As opposed to the family unit making money? These are not people who went to Eton and have estates all over the country.

Can you answer one question - do you have kids?

IHT is there to increase social mobility by reducing the concentration of wealth. Do you want to live in a country that returns to the dark days of the late 19th century when a few hundred people controlling 90% of the land?
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So Jim the mechanic's son is a suitable target to avoid (dark looming drum roll) dark days of the late 19th century when a few hundred people controlling 90% of the land. Really?

Let me be honest and put down what i'm thinking - Is this actually your viewpoint or is it one you've adopted because you (likely) have nothing coming and (likely) no kids yet to change your viewpoint? Or do you really believe IHT at this level is actually effective at stopping what you describe above?

Is your argument one of class or amount? On one hand you say 'it's not a lot' and on the other you say you don't ant to go back to the days where the 90% of and was controlled by the few?

If you look at the list of countries that don't have a form of IHT it's large. Even larger is the list of countries that are quickly dropping it because they are realising that, hint hint, it's no longer the 19th Century and we no longer have said barriers where mobility was limited by class.

In the last 10 years Singapore, Sweden, Hong Kong and Austria have dumped iHT. Even Russia, the country that can tell you all about 90% controlling the land have dropped IHT.
 
Castiel said:
Pretty much, just a three bed semi round here costs that. £325k when a property is involved is not that much at all.
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<amiga sits thinking the worlds gone mad whilst sat in his 5 bed detached, twin garage house that's valued at 200k>
 
amigafan2003 said:
<amiga sits thinking the worlds gone mad whilst sat in his 5 bed detached, twin garage house that's valued at 200k>
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There is a distinct difference in house prices according to region, sometimes even areas...a ex local authority house on a run down estate will net you £200k here, but 45 miles north, you can buy a similar property for half that.

Mine, similar to yours by the sounds of it, is more than double your valuation. :eek:

Crazy world, you're right....perhaps IHT should reflect the regional variations regarding property prices?
 
amigafan2003 said:
<amiga sits thinking the worlds gone mad whilst sat in his 5 bed detached, twin garage house that's valued at 200k>
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Heaven knows what you'll think when you see the likes of this, not far from me.
http://www.rightmove.co.uk/property-for-sale/property-28269273.html

Fact is pretty much everyone who owns property in London will have an estate that's liable for inheritance tax.
It's another one of those things that's been affected by fiscal drag as property prices have increased.
 
Castiel said:
There is a distinct difference in house prices according to region, sometimes even areas...a ex local authority house on a run down estate will net you £200k here, but 45 miles north, you can buy a similar property for half that.

Mine, similar to yours by the sounds of it, is more than double your valuation. :eek:

Crazy world, you're right....perhaps IHT should reflect the regional variations regarding property prices?
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Yeah - I'm somewhere around here - not exactly there for obvious reasons. A decent three bed semi with garage would be more like £120k here.
 
Castiel said:
I live in Wiltshire, near Salisbury. A world away as far as house prices go..
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Yes, quite.

Do you live in an active war zone? I thought a 3 bedroom semi for 170k was good where I am.
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No, it's very nice round here. However, travel 4 miles south and it's a different story (but even then you have houses like this and I'd NEVER consider living in that area!) Then again, travel 6 miles further south than that and your in Lytham - super posh!
 
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Vanilla said:
As opposed to the family unit making money? These are not people who went to Eton and have estates all over the country.

Can you answer one question - do you have kids?
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Yes I do. I think it is entirely reasonable for someone who gets a large windfall with no effort on their part to pay tax on it.


Is your argument one of class or amount? On one hand you say 'it's not a lot' and on the other you say you don't ant to go back to the days where the 90% of and was controlled by the few?

If you look at the list of countries that don't have a form of IHT it's large. Even larger is the list of countries that are quickly dropping it because they are realising that, hint hint, it's no longer the 19th Century and we no longer have said barriers where mobility was limited by class.
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IHT is a lot lower than in previous decades. Look how many stately homes are owned by the National Trust; that was a way of reducing estate duty.

IHT reduces wealth concentration making it harder for people to gain an enormous advantage through accident of birth. Yes it could be higher but something is better than nothing. Reducing or eliminating IHT will increase wealth concentration over time.

Social mobility has declined significantly in Britain in recent decades. How much does property cost in relation to incomes? How much do degrees cost now? How small is that benefit compared to the past? What is youth unemployment? What is the underemployment rate?
 
momentimori said:
Yes I do. I think it is entirely reasonable for someone who gets a large windfall with no effort on their part to pay tax on it
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Whilst the beneficiary has not paid tax, the deceased will have paid tax throughout their lives on 'every' single thing that they have purchased (which is then subsequently passed onto the beneficiary).

To then be 'taxed again' (in death) is a little unfair, no?

Me personally... I want my parents to spend every single drop of money they have earned right up until they go. As you say, I have played no part in their wealth generation (probably hindered it! :p haha) so I don't want/expect anything, but that doesn't mean the government should get it.
 
sbi5ar said:
Whilst the beneficiary has not paid tax, the deceased will have paid tax throughout their lives on 'every' single thing that they have purchased (which is then subsequently passed onto the beneficiary).

To then be 'taxed again' (in death) is a little unfair, no?
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The deceased doesn't need the money and the beneficiary is getting a windfall. Paying some tax on it isn't that bad. Most is better than none.

Being taxed again isn't unfair at all. You pay tax on your income and again when you spend it through VAT, import duties etc. What is inherently different about paying IHT?
 
Nobody's mentioned Whole of life policy in trust.

This works by taking out a policy to pay the estimated IHT bill. A life policy is taken out which will pay out on the death of policy holder (2nd death if spouse is alive).

The policy can be gifted into a trust, it doesn't matter if its a Discretionary Trust or a Bare Trust. Since the policy has no value it is neither a Potentially Exempt Transfer (PET) nor Chargeable Transfer and there is no seven year taper on the gift.

When the the family member dies the policy pays out to the trust not the estate. The trustees can then use the money to pay the IHT bill. Its not tax avoidance as the tax is paid.

This only works if the health of the life assured are good enough to get cover. So would not work for terminally ill. Also Whole of Life Policies are expensive.
 
momentimori said:
Yes I do. I think it is entirely reasonable for someone who gets a large windfall with no effort on their part to pay tax on it.
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It depends on your view of 'no effort'. I notice you avoid the question about having kids.

You make it sound like they are winning the lottery (which funnily enough is not taxed).

In most cases the families are not getting a windfall. They are being charged on the perceived value of their house which has risen massively while IHT limits have not risen in kind.

A question - if more and more working and middle class families are being hit by IHT does this mean you agree these people are the target for IHT? I'm confused because on one hand you're talking about stately homes?

IHT is a lot lower than in previous decades. Look how many stately homes are owned by the National Trust; that was a way of reducing estate duty.
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Wow, we're talking about how IHT is hitting working and middle classes and you're talking about stately homes. Out of touch much?

Those with that kind of money don't pay IHT tax any more.

IHT reduces wealth concentration making it harder for people to gain an enormous advantage through accident of birth. Yes it could be higher but something is better than nothing. Reducing or eliminating IHT will increase wealth concentration over time.

Social mobility has declined significantly in Britain in recent decades. How much does property cost in relation to incomes? How much do degrees cost now? How small is that benefit compared to the past? What is youth unemployment? What is the underemployment rate?
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Nothing you've said has anything to do with social mobility and what you've just said makes my exact point - you've just argued yourself out of your own point. "How much do degrees cost" " How much does a property cost".

We live in a different time from when IHT tax was introduced and now anyone can go to university and anyone can own a property. It's no longer about 90% landowners and only the elite going to university. Social mobility has increased massively in the last few decades.

A question (maybe you'll answer one?) - when all these people in the middle class and working class die and try to leave what's left to the kids what should they do with their stately home?
 
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