Why should we have to pay inheritance tax?

Bunka · 20 Aug 2006 at 21:13

jamesrw said:
Surely the threshold should rise with house prices?

Technically it has, but only a small amount and not to the same percentage as house prices have risen. Therefore giving the illusion that "look we've made steps to sort it out".

Alex_L · 20 Aug 2006 at 21:14

jamesrw said:
Surely the threshold should rise with house prices?

don't be silly

, that thieving **** in the treasury would get his hands on less of peoples hard earned cash.

Richdog · 20 Aug 2006 at 21:14

Bunka said:
Why SHOULD you have to have a smaller house though. Your dad worked hard for a decent house and wants you to have it. Why the hell should it be sold and you move into a smaller house just because it is the right thing to do in giving 40% of it to the government. Your attitude is on a similar line to communism. Spread out all the wealth and everyone is happy. It never works like that.

ECATLY! What if you're house has been in the family for years and years, it has all of your memories and then what... you have to sell it and sacrifice all that just to pay for some bloody tax that you don't feel you should be paying in the first place? Sickening.

mrgubby · 20 Aug 2006 at 21:17

With inheritance tax , if me & the wife pop our clogs in an accident our house will have to be sold to pay the tax.

result

My kids will have lost their parents / family house and any semblance of stability in one hit .

IHT is an envy tax.

ArmyofHarmony · 20 Aug 2006 at 21:18

Im with Richdog on this one, i'm strongly against inheritance tax and will do everything in my power to avoid it when i'm old and ready to go (but it should be abolished by then anyway).

If you know you are going to die, then just transfer the bulk of your money to your child in advance, and get them to pay you an allowance each month until you go... that's allowed right?

Bunka · 20 Aug 2006 at 21:21

ArmyofHarmony said:
If you know you are going to die, then just transfer the bulk of your money to your child in advance, and get them to pay you an allowance each month until you go... that's allowed right?

iirc, the government can trace it back 7 years, so you would have to transfer your money 7 years before you die.

There are other ways of avoiding a large proportion of inheritance tax, but it's still a complete joke anyway.

ArmyofHarmony · 20 Aug 2006 at 21:28

Sure they can trace it back, but surely it isnt illegal?

inheritance tax is the biggest joke ever, can't wait till its gone (even though it wont effect me for years to come, hopefully!)

Mickey_D · 20 Aug 2006 at 21:29

Goberpiles316 said:
TBh that money has already been through the tax system when it was earned, I think its mad that the government can tax more money out of it.

This is what bothers me most about any form of inheritence tax. The money originally earned has been taxed, the estate has already been taxed (income used to buy estate is hence ALREADY taxed twice), and now you're going to have to pay ANOTHER tax on it all AGAIN?!?!? WTF? How can this be a good thing?

Bunka · 20 Aug 2006 at 21:33

ArmyofHarmony said:
Sure they can trace it back, but surely it isnt illegal?

Nah not illegal, if i'm right, then they'll just work out your parents capital 7 years before they die and tax you on that figure.

alexakasloth · 20 Aug 2006 at 21:36

Bah, just sell house, share it out in cash, and when the government ask, your parents put it all on red 16.

ArmyofHarmony · 20 Aug 2006 at 21:37

but your parents would not be giving you any money AFTER they died... so wouldnt there be no money to tax?

I can't believe what you're telling me is true...

so if my dad was a tramp, but used to be a millionaire however i won all his money in a game of poker a year ago...then he died... i'd get taxed on the million i won in an unrelated incident?

Richdog · 20 Aug 2006 at 21:38

Mickey_D said:
This is what bothers me most about any form of inheritence tax. The money originally earned has been taxed, the estate has already been taxed (income used to buy estate is hence ALREADY taxed twice), and now you're going to have to pay ANOTHER tax on it all AGAIN?!?!? WTF? How can this be a good thing?

Now please explain this conept to Von Luck and loopstah, ensuring you make it very clear and very simple. Add pictures if necessary.

ArmyofHarmony said:
so if my dad was a tramp, but used to be a millionaire however i won all his money in a game of poker a year ago...then he died... i'd get taxed on the million i won in an unrelated incident?

That just gave me a proepr lol... best implausible scenario ever. Love it.

However I agree with you, it's hard to believe.

csmager · 20 Aug 2006 at 21:39

ArmyofHarmony said:
but your parents would not be giving you any money AFTER they died... so wouldnt there be no money to tax?

I can't believe what you're telling me is true...

so if my dad was a tramp, but used to be a millionaire however i won all his money in a game of poker a year ago...then he died... i'd get taxed on the million i won in an unrelated incident?

You get taper relief - if he gave you the money 6 years before he died, you wouldnt' have to pay 40%. It goes from 40% to 0% 7 years before.

In the situation you described, it wasn't a gift - it was a poker game. No idea if you could prove that.

Raymond Lin · 20 Aug 2006 at 21:40

ArmyofHarmony said:
but your parents would not be giving you any money AFTER they died... so wouldnt there be no money to tax?

I can't believe what you're telling me is true...

so if my dad was a tramp, but used to be a millionaire however i won all his money in a game of poker a year ago...then he died... i'd get taxed on the million i won in an unrelated incident?

inheritance tax as the name suggest is the tax on the estate you inheritanted, if the amount total is less than £285,000, there is no tax to pay.

People who get caught out are usually those who made no preparation for IHT or those had accidents with sudden death (which i am totally sympathised with). However, if your parents are in retirement age, you really should start thinking about IHT and avoid it. You know its coming, so do something about it rather than compliant about it when it gets hit.

ArmyofHarmony · 20 Aug 2006 at 21:41

What if your dad went "missing"...the body was never recovered and nobody could prove he was dead. However you took all his money a year before?

Raymond Lin · 20 Aug 2006 at 21:41

csmager said:
You get taper relief - if he gave you the money 6 years before he died, you wouldnt' have to pay 40%. It goes from 40% to 0% 7 years before.

In the situation you described, it wasn't a gift - it was a poker game. No idea if you could prove that.

I suppose it would be income tax would it not?

csmager · 20 Aug 2006 at 21:42

Raymond Lin said:
I suppose it would be income tax would it not?

Yes, it would I suppose. I'd be tempted to bung it somewhere offshore and not declare it if I won £1m in a game of poker.

Raymond Lin · 20 Aug 2006 at 21:42

ArmyofHarmony said:
What if your dad went "missing"...the body was never recovered and nobody could prove he was dead. However you took all his money a year before?

if a person is missing for 7 years then he could be legally declared deceased and the estate pass on according to the will or law of intestacy.

ironman · 20 Aug 2006 at 21:49

This tax is one of the reasons why my parents houses and businesses are going to be transferred into my name, well they will be before i'm 25 anyway

Bunka · 20 Aug 2006 at 21:51

gurdas said:
This tax is one of the reasons why my parents houses and businesses are going to be transferred into my name, well they will be before i'm 25 anyway

I take it they trust you then...

My parents are doing a similar thing, but with a trust fund, so we all technically own the house etc. when they die, both my brother and I still technically own the place ourselves, just two trustees aren't members anymore.