Quick question - inheritance tax...
Discussion
As the government website isn't really that clear regarding such matters, here's one for the educated amongst you lot:
(All figures are exaggerated for clarity)...
Say a married couple of 30+ years. The bloke passes but has always dealt with the financial matters & had most of the marital assets in his name (shares, multiple homes, cars etc).
If his estate is worth (say) £2m, would any of this be liable for IHT or pass straight to the spouse (do not pass go Mr f
king taxman or collect 40 fking %)...?
Assuming the will says everything to the spouse (as it should be).
(All figures are exaggerated for clarity)...
Say a married couple of 30+ years. The bloke passes but has always dealt with the financial matters & had most of the marital assets in his name (shares, multiple homes, cars etc).
If his estate is worth (say) £2m, would any of this be liable for IHT or pass straight to the spouse (do not pass go Mr f
king taxman or collect 40 fking %)...?Assuming the will says everything to the spouse (as it should be).
OP - Website is pretty useful. 30 secs of searching . . .
"5. Leaving assets to a spouse or civil partner
An estate is exempt from Inheritance Tax if the deceased left everything to their husband, wife or civil partner, who lives permanently in the UK.
Married couples and civil partners can give any value of gifts to each other during their lifetime without Inheritance Tax being due on them.
This is known as ‘spouse or civil partner exemption’.
Transferring Inheritance Tax thresholds
If someone’s estate is less than the Inheritance Tax threshold of £325,000, the remaining threshold can be transferred to their husband, wife or civil partner’s estate when they die - even if they remarried.
This means the surviving partner’s estate can be worth up to £650,000 before any Inheritance Tax is due.
The transfer is made when the surviving husband, wife or civil partner dies and is done by the executor of their will or the administrator of their estate when they work out how much it’s worth.
Exceptions
The rules for transferring a threshold are different if the:
estate of the first spouse or civil partner qualified for relief on woodland or heritage assets
surviving spouse or civil partner had an unsecured pension as the ‘relevant dependant’ of a person who died with an Alternatively Secured Pension
first spouse or civil partner died before 1975
Contact the probate and Inheritance Tax helpline for more information about these exceptions"
https://www.gov.uk/inheritance-tax/leaving-assets-...
"5. Leaving assets to a spouse or civil partner
An estate is exempt from Inheritance Tax if the deceased left everything to their husband, wife or civil partner, who lives permanently in the UK.
Married couples and civil partners can give any value of gifts to each other during their lifetime without Inheritance Tax being due on them.
This is known as ‘spouse or civil partner exemption’.
Transferring Inheritance Tax thresholds
If someone’s estate is less than the Inheritance Tax threshold of £325,000, the remaining threshold can be transferred to their husband, wife or civil partner’s estate when they die - even if they remarried.
This means the surviving partner’s estate can be worth up to £650,000 before any Inheritance Tax is due.
The transfer is made when the surviving husband, wife or civil partner dies and is done by the executor of their will or the administrator of their estate when they work out how much it’s worth.
Exceptions
The rules for transferring a threshold are different if the:
estate of the first spouse or civil partner qualified for relief on woodland or heritage assets
surviving spouse or civil partner had an unsecured pension as the ‘relevant dependant’ of a person who died with an Alternatively Secured Pension
first spouse or civil partner died before 1975
Contact the probate and Inheritance Tax helpline for more information about these exceptions"
https://www.gov.uk/inheritance-tax/leaving-assets-...
Jim1556 said:
Thanks for the replies chaps, I found that page but it was the This means the surviving partner’s estate can be worth up to £650,000 before any Inheritance Tax is due. that confused me...
IHT is disgusting and should be abolished!
So the website was fine, you just wanted a rant about IHT. If the figures you used are exaggerated, then what's the value of your estate and let's see how much you stand to lose. IHT is disgusting and should be abolished!
Jim1556 said:
No, as I said, that particular sentence was confusing...
I don't want or need anything, just don't want the government to get any more than they already have!
I'd be much happier if you could choose any liability to go to a charity instead!
It's not confusing though. I don't pretend to understand this stuff, but the website is crystal clear to me. I don't want or need anything, just don't want the government to get any more than they already have!
I'd be much happier if you could choose any liability to go to a charity instead!
I am confused that you feel IHT is disgusting, but would still happily lose the same amount if you could give it to charity. That doesn't flow logically. Either you begrudge the 40% as per your posts, or you don't.
If you don't then give the whole liabilityto charity now as the chances are that it will reduce your liability significantly and possibly to £0, which exactly meets your requirements.
As a side note, there are plans afoot to up the threshold to an effective £1m for family homes so effectively taking all but the truly wealthy out of IHT entirely IIRC.
http://www.cityam.com/219725/july-budget-2015-geor...
Edited by JacquesMesrine on Tuesday 2nd February 18:15
Jim1556 said:
Thanks for the replies chaps, I found that page but it was the This means the surviving partner’s estate can be worth up to £650,000 before any Inheritance Tax is due. that confused me...
IHT is disgusting and should be abolished!
when the surviving partner dies , the IHT threshold will be 650 k IHT is disgusting and should be abolished!
why is IOHT disgusting , outside the PH (dreamer) bubble and the London property bubble 325k is still a fairly serious sum of money and 650k by anything other than inside the M25 proprty prices is a serious wedge ...
mikees said:
Using nill band trusts you can protect 1.3m from iht ( one per partner). I have 4 ( due to previous partners deaths) so pretty secure. It can be done.
I'm against iht as I've already paid 40% on it
How does that work? I thought these just meant that each partner got to use up their allowance in full, which the rules allow for everyone to do anyway now, so these are pretty redundant. How does that get to £1.3m protected though?I'm against iht as I've already paid 40% on it
Also, I'm opposed to high rate income tax, VAT, fuel duty, council tax, VED, IPT, airport taxes and so on, as I've paid full whack on all of them in the past year and longer. In fact IHT is probably my lowest concern, as I'll be dead when / if it affects my estate.
Burwood said:
TwigtheWonderkid said:
Jim1556 said:
IHT is disgusting and should be abolished!
It really isn't, and it shouldn't. But in the case you quote, there isn't any to pay anyway.mph1977 said:
Burwood said:
TwigtheWonderkid said:
Jim1556 said:
IHT is disgusting and should be abolished!
It really isn't, and it shouldn't. But in the case you quote, there isn't any to pay anyway.GreatGranny said:
OP - Website is pretty useful. 30 secs of searching . . .
"5. Leaving assets to a spouse or civil partner
An estate is exempt from Inheritance Tax if the deceased left everything to their husband, wife or civil partner, who lives permanently in the UK.
Married couples and civil partners can give any value of gifts to each other during their lifetime without Inheritance Tax being due on them.
This is known as ‘spouse or civil partner exemption’.
Transferring Inheritance Tax thresholds
If someone’s estate is less than the Inheritance Tax threshold of £325,000, the remaining threshold can be transferred to their husband, wife or civil partner’s estate when they die - even if they remarried.
This means the surviving partner’s estate can be worth up to £650,000 before any Inheritance Tax is due.
The transfer is made when the surviving husband, wife or civil partner dies and is done by the executor of their will or the administrator of their estate when they work out how much it’s worth.
Exceptions
The rules for transferring a threshold are different if the:
estate of the first spouse or civil partner qualified for relief on woodland or heritage assets
surviving spouse or civil partner had an unsecured pension as the ‘relevant dependant’ of a person who died with an Alternatively Secured Pension
first spouse or civil partner died before 1975
Contact the probate and Inheritance Tax helpline for more information about these exceptions"
https://www.gov.uk/inheritance-tax/leaving-assets-...
Anyone know how this works? Does the dead partner have to transfer the difference in their will, or can the surviving partner just snaffle it? My parents divorced in the '80s and my dad died in '94 and I suspect it's amuse my mum if she could pinch his allowance. "5. Leaving assets to a spouse or civil partner
An estate is exempt from Inheritance Tax if the deceased left everything to their husband, wife or civil partner, who lives permanently in the UK.
Married couples and civil partners can give any value of gifts to each other during their lifetime without Inheritance Tax being due on them.
This is known as ‘spouse or civil partner exemption’.
Transferring Inheritance Tax thresholds
If someone’s estate is less than the Inheritance Tax threshold of £325,000, the remaining threshold can be transferred to their husband, wife or civil partner’s estate when they die - even if they remarried.
This means the surviving partner’s estate can be worth up to £650,000 before any Inheritance Tax is due.
The transfer is made when the surviving husband, wife or civil partner dies and is done by the executor of their will or the administrator of their estate when they work out how much it’s worth.
Exceptions
The rules for transferring a threshold are different if the:
estate of the first spouse or civil partner qualified for relief on woodland or heritage assets
surviving spouse or civil partner had an unsecured pension as the ‘relevant dependant’ of a person who died with an Alternatively Secured Pension
first spouse or civil partner died before 1975
Contact the probate and Inheritance Tax helpline for more information about these exceptions"
https://www.gov.uk/inheritance-tax/leaving-assets-...
Burwood said:
By some, no doubt. I'd happily see it abolished. It raises little because it's really an ignorance tax. The wealthy avoid it
Indeed. It is in effect a further tax on those who are just about doing well enough but not really rich. I resent it in principle let alone execution.
Burwood said:
mph1977 said:
Burwood said:
TwigtheWonderkid said:
Jim1556 said:
IHT is disgusting and should be abolished!
It really isn't, and it shouldn't. But in the case you quote, there isn't any to pay anyway.k all of nothing from money I will be earning from some private work in the next couple of months. If I go over that threshold, I stop paying effectively 90% tax so that I can put a bit more aside for a rainy day in the future, but what will happen? Well, I'll go up to 45% tax and start losing my tax free pension contribution allowance at a punitive rate so I will still be paying effectively 90-odd% tax. What's the incentive for me to work harder? The income would look good an paper if I needed another mortgage but will go straight to the exchequer so there's no point. Then when I die, the state swoops in and takes another 40% from most of it, and no, it's not property within M25, I live quite a bit north of that. The super rich do avoid IHT as well as other forms of tax so those earning several hundred thousand to several million pounds a year often don't pay anything. Those in the middle get fleeced. I don't have enough to be able to put hundreds of thousands/millions into schemes where I can't touch the money nor pay fees of tens of thousands of pounds a year to maintain them, so I get screwed over with a ridiculous income tax while alive, then my daughter will get screwed over when I die
I don't mind paying tax but why doesn't the exchequer go after Google? £130m tax on earnings of over £5 billion, most of which has been passed through multiple paper subsidiaries as "royalty" rather than profit. Google's overheads are nothing like 97.4%, they don't sell any goods, just advertising. Amazon, eBay, PayPal, Starbucks, they're all at it saving themselves billions of pounds in tax every year. If those various loopholes were closed, not only could IHT be abolished, far more lower income families could be given tax breaks.
Anyway, I'm off for a lie down before I explode mid-rant...
mikees said:
I'm against iht as I've already paid 40% on it
I doubt that. If you are anything like me, and most people who will leave to their kids an amount far in excess of the IHT threshold, the vast majority of it is due to London house price inflation, on which I've paid no tax whatsoever.I know it sounds cool to say "I've worked for every penny I've got" and "I've already paid tax on my money once", but for most people it's delusional nonsense.
Sorry if that pricks anyone's ego balloon.
Bill said:
Anyone know how this works? Does the dead partner have to transfer the difference in their will, or can the surviving partner just snaffle it? My parents divorced in the '80s and my dad died in '94 and I suspect it's amuse my mum if she could pinch his allowance.
You can only transfer allowance if the spouse died while they were married but not if they had divorced prior to the death. As a result, it is possible for someone to have multiple allowances transferred if they lost multiple spouses through death while married, but that isn't the case for divorced couples. The allowance isn't transferred at the time of first death, it's transferred after the second death by the executor(s) of the second estate by submitting Form IHT217 to transfer the nil rate band, this has to be done within 24 months of the second death. The executor(s) of the first estate have to keep records showing how much can be transferred and give these to the surviving partner and/or the executor(s) of their will.QuickQuack said:
It's not an ignorance tax, it's a death tax for hard workers and it's beyond excessive. The part that's subject to IHT, well I've already paid 40-90% tax on it. Because of loss of tax-free allowance while also paying 40% tax on it, I'll see fk all of nothing from money I will be earning from some private work in the next couple of months. If I go over that threshold, I stop paying effectively 90% tax so that I can put a bit more aside for a rainy day in the future, but what will happen? Well, I'll go up to 45% tax and start losing my tax free pension contribution allowance at a punitive rate so I will still be paying effectively 90-odd% tax. What's the incentive for me to work harder? The income would look good an paper if I needed another mortgage but will go straight to the exchequer so there's no point. Then when I die, the state swoops in and takes another 40% from most of it, and no, it's not property within M25, I live quite a bit north of that.
The super rich do avoid IHT as well as other forms of tax so those earning several hundred thousand to several million pounds a year often don't pay anything. Those in the middle get fleeced. I don't have enough to be able to put hundreds of thousands/millions into schemes where I can't touch the money nor pay fees of tens of thousands of pounds a year to maintain them, so I get screwed over with a ridiculous income tax while alive, then my daughter will get screwed over when I die
I don't mind paying tax but why doesn't the exchequer go after Google? £130m tax on earnings of over £5 billion, most of which has been passed through multiple paper subsidiaries as "royalty" rather than profit. Google's overheads are nothing like 97.4%, they don't sell any goods, just advertising. Amazon, eBay, PayPal, Starbucks, they're all at it saving themselves billions of pounds in tax every year. If those various loopholes were closed, not only could IHT be abolished, far more lower income families could be given tax breaks.
Anyway, I'm off for a lie down before I explode mid-rant...
How the hell are you paying 90% tax? If you're in the £100,000 a £120000 bracket, then you are a top earner whether you like it or not, you're probably in the top 3% of earners in the country, so you're hardly hard done to. k all of nothing from money I will be earning from some private work in the next couple of months. If I go over that threshold, I stop paying effectively 90% tax so that I can put a bit more aside for a rainy day in the future, but what will happen? Well, I'll go up to 45% tax and start losing my tax free pension contribution allowance at a punitive rate so I will still be paying effectively 90-odd% tax. What's the incentive for me to work harder? The income would look good an paper if I needed another mortgage but will go straight to the exchequer so there's no point. Then when I die, the state swoops in and takes another 40% from most of it, and no, it's not property within M25, I live quite a bit north of that. The super rich do avoid IHT as well as other forms of tax so those earning several hundred thousand to several million pounds a year often don't pay anything. Those in the middle get fleeced. I don't have enough to be able to put hundreds of thousands/millions into schemes where I can't touch the money nor pay fees of tens of thousands of pounds a year to maintain them, so I get screwed over with a ridiculous income tax while alive, then my daughter will get screwed over when I die
I don't mind paying tax but why doesn't the exchequer go after Google? £130m tax on earnings of over £5 billion, most of which has been passed through multiple paper subsidiaries as "royalty" rather than profit. Google's overheads are nothing like 97.4%, they don't sell any goods, just advertising. Amazon, eBay, PayPal, Starbucks, they're all at it saving themselves billions of pounds in tax every year. If those various loopholes were closed, not only could IHT be abolished, far more lower income families could be given tax breaks.
Anyway, I'm off for a lie down before I explode mid-rant...
Not really a valid argument, as you're one of the earners that most would describe as a fat cats trying to dodge paying your fair share. Well at least you would be if you were a company, like Google;)
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