Quick question - inheritance tax...
Discussion
Drumroll said:
Sorry don't get the OP's problem. He thinks it is unfair that if his parents die their estate will have to pay money to the government before he can get his hands on any money. Please can he explain why that is any different than a lot of families who have a modest asset in a house, which they scrimped and saved to buy and is Well below IT threshold. Who if they have to go into care, then have to use the sale of their house to pay for that care?
Er, nothing to do with my parents, my original question was about another relative and whether she'd be liable - as I said many pages ago, I neither want or need anything from it. The query was answered on the first page - this has just gone off on a tangent...Selling the family home to pay for care is a completely different kettle of fish!
RobinOakapple said:
The estate of the deceased is not the same as the dead person owning anything. The estate does not belong to the deceased because he or she is dead. It belongs to whoever it is bequeathed to (minus taxes and disbursements).
I'm confused, are you agreeing with the sentiment that dead people don't pay taxes.Craigyp79 said:
RobinOakapple said:
The estate of the deceased is not the same as the dead person owning anything. The estate does not belong to the deceased because he or she is dead. It belongs to whoever it is bequeathed to (minus taxes and disbursements).
I'm confused, are you agreeing with the sentiment that dead people don't pay taxes.Taxes are due on the estate in certain cases, but the estate is not the dead person, therefore the dead person has not paid taxes on that money twice (and in many cases, not even once).
RobinOakapple said:
Dead people don't do anything, due to their being dead. Not being able to do anything is a characteristic of dead people, it's one of the ways of determining whether people are in fact dead. Able to do something- alive. Not able to do anything- dead.
Taxes are due on the estate in certain cases, but the estate is not the dead person, therefore the dead person has not paid taxes on that money twice (and in many cases, not even once).
Right, sorry, yes we're both actually agreeing on that. My post was disagreeing with the poster who thinks dead people pay taxes if they don't live in the UK. Some sort of voodoo I'd imagine....Taxes are due on the estate in certain cases, but the estate is not the dead person, therefore the dead person has not paid taxes on that money twice (and in many cases, not even once).
RobinOakapple said:
The estate of the deceased is not the same as the dead person owning anything. The estate does not belong to the deceased because he or she is dead. It belongs to whoever it is bequeathed to (minus taxes and disbursements).
Incorrect. In the UK, the estate of the deceased belongs to neither of the above. Legal title is held by the executor(s) or administrator(s) as personal representative(s) of the deceased*. It only passses to others after the distribution has taken place.* That is why if appointed and you
it up you can be sued.e.g. for failing to distribute to someone who is entitled to receive and/or any diminution in the value of the assets of the estate.
JacquesMesrine said:
You are still spectacularly failing to see the obvious point around the house. If you have a house that your parents bought in the 1970s in London, then they will have done nothing to see that rocket in value. Why should that income be tax free for anyone other than the homeowner?
And £1.46m isn't enough to buy a house? Your mothers engagement ring is worth over £325000 on its own? And I'm picking the very worst case on thresholds there? If it is then I can't see that you're going to be skint.
This thread is heading from the sublime to the ridiculous.
You are missing the point that a house is only worth something if you sell it. And £1.46m isn't enough to buy a house? Your mothers engagement ring is worth over £325000 on its own? And I'm picking the very worst case on thresholds there? If it is then I can't see that you're going to be skint.
This thread is heading from the sublime to the ridiculous.
How about this? You get the option to flip the value of your house for that of your parents house in respect of IHT providing you move into it and live there for some set period. That way those that are not already as well off as their parents still have a roof over their heads without having to lose even more in stamp duty, solicitors fees, IHT interest or undervaluing the house for a quick sale.
As far as the ring goes it is simple, the value is sentimental and never realised by sale, however the tax you pay to keep it may be many times the original purchase price. As above, we are not in this position, we do not have to make this choice.
Skint is relative, there was an article in the Telegraph, iirc, where a family with a take home income of £10k per month was bemoaning the state of their finances. The new tax relief rules for mortgages on buy to let meant the flat they had would no longer make a profit, they did not want to sell it because then they would lose the profit from future price rises. The cost of the kids schools, the three holidays a year and the horrific mortgage on their own house which absorbed a whole quarter of their net income was too much to bear. Somehow they just could not clear the £8k they had on credit cards. A quick calculation showed just their disposable income was over double our entire income. Yet oddly enough our net asset value is about the same. We are not at all skint, odd that. Do I begrudge what they earn, no, I do wonder how someone that is smart enough to be paid that much can be so bloody bad with running their finances though.
Back to my original gripe.
So let's say they were to inherit what we are then the tax would be a year's income. We will effectively still be paying the IHT past the point at which the rules will change such we would have not had to pay anything. Ah you say, it is the estate that is taxed not you, well as it happens the house we are inheriting was built by by people that earned less than I do. So why are they suddenly paying 40% tax just because their house is worth the same as a neighbour's that earns many times what they do?.
Should there be IHT? Yes, probably, but the rules need to be made fairer. As the stamp duty the tax needs to change and the income level of both the deceased and recipient relative to the value of the estate should be taken into account.
A well run state should not need to strip the assets of its citizens in order to maintain itself.
Edited by Toltec on Friday 5th February 11:21
Toltec said:
A well run state should not need to strip the assets of its citizens in order to maintain itself.
The state isn't maintaining itself, the state is paying for things that by and large the voters want.If the public want to pay less tax they need to decide which services they no longer want.
What people that have accumulated wealth, should remember is that it is partly because we live in a safe, educated democracy that they have the ability and opportunity to achieve such wealth and to hang onto the majority of it. People don't get rich in a bubble outside of the society in which they live, they make money partly because of the society they live in. Therefore it is not unreasonable for people to contribute to that.
Toltec said:
You are missing the point that a house is only worth something if you sell it.
How about this? You get the option to flip the value of your house for that of your parents house in respect of IHT providing you move into it and live there for some set period. That way those that are not already as well off as their parents still have a roof over their heads without having to lose even more in stamp duty, solicitors fees, IHT interest or undervaluing the house for a quick sale.
As far as the ring goes it is simple, the value is sentimental and never realised by sale, however the tax you pay to keep it may be many times the original purchase price. As above, we are not in this position, we do not have to make this choice.
Skint is relative, there was an article in the Telegraph, iirc, where a family with a take home income of £10k per month was bemoaning the state of their finances. The new tax relief rules for mortgages on buy to let meant the flat they had would no longer make a profit, they did not want to sell it because then they would lose the profit from future price rises. The cost of the kids schools, the three holidays a year and the horrific mortgage on their own house which absorbed a whole quarter of their net income was too much to bear. Somehow they just could not clear the £8k they had on credit cards. A quick calculation showed just their disposable income was over double our entire income. Yet oddly enough our net asset value is about the same. We are not at all skint, odd that. Do I begrudge what they earn, no, I do wonder how someone that is smart enough to be paid that much can be so bloody bad with running their finances though.
Back to my original gripe.
So let's say they were to inherit what we are then the tax would be a year's income. We will effectively still be paying the IHT past the point at which the rules will change such we would have not had to pay anything. Ah you say, it is the estate that is taxed not you, well as it happens the house we are inheriting was built by by people that earned less than I do. So why are they suddenly paying 40% tax just because their house is worth the same as a neighbour's that earns many times what they do?.
Should there be IHT? Yes, probably, but the rules need to be made fairer. As the stamp duty the tax needs to change and the income level of both the deceased and recipient relative to the value of the estate should be taken into account.
A well run state should not need to strip the assets of its citizens in order to maintain itself.
Your posts are too long. How about this? You get the option to flip the value of your house for that of your parents house in respect of IHT providing you move into it and live there for some set period. That way those that are not already as well off as their parents still have a roof over their heads without having to lose even more in stamp duty, solicitors fees, IHT interest or undervaluing the house for a quick sale.
As far as the ring goes it is simple, the value is sentimental and never realised by sale, however the tax you pay to keep it may be many times the original purchase price. As above, we are not in this position, we do not have to make this choice.
Skint is relative, there was an article in the Telegraph, iirc, where a family with a take home income of £10k per month was bemoaning the state of their finances. The new tax relief rules for mortgages on buy to let meant the flat they had would no longer make a profit, they did not want to sell it because then they would lose the profit from future price rises. The cost of the kids schools, the three holidays a year and the horrific mortgage on their own house which absorbed a whole quarter of their net income was too much to bear. Somehow they just could not clear the £8k they had on credit cards. A quick calculation showed just their disposable income was over double our entire income. Yet oddly enough our net asset value is about the same. We are not at all skint, odd that. Do I begrudge what they earn, no, I do wonder how someone that is smart enough to be paid that much can be so bloody bad with running their finances though.
Back to my original gripe.
So let's say they were to inherit what we are then the tax would be a year's income. We will effectively still be paying the IHT past the point at which the rules will change such we would have not had to pay anything. Ah you say, it is the estate that is taxed not you, well as it happens the house we are inheriting was built by by people that earned less than I do. So why are they suddenly paying 40% tax just because their house is worth the same as a neighbour's that earns many times what they do?.
Should there be IHT? Yes, probably, but the rules need to be made fairer. As the stamp duty the tax needs to change and the income level of both the deceased and recipient relative to the value of the estate should be taken into account.
A well run state should not need to strip the assets of its citizens in order to maintain itself.
Edited by Toltec on Friday 5th February 11:21
I'll deal with the flipping piece. What if I've moved area with my job? how is that fair on me that Johnny Benefit Scrounger can get it totally free of IHT because he's milked the system whereas I've worked hard and haven't?
The wealthy person vs you is simple. They have paid more tax in the to lifetime due to their higher income, so that levels the playing field. Now you're both dead you have the same starting point. Both of you have sat back and watched your house sky rocket in value by doing bugger all, other than living there. Taxing it if it's valued at a figure that is more than 7 times the average UK house price is very fair.
Devil2575 said:
The state isn't maintaining itself, the state is paying for things that by and large the voters want.
If the public want to pay less tax they need to decide which services they no longer want.
What people that have accumulated wealth, should remember is that it is partly because we live in a safe, educated democracy that they have the ability and opportunity to achieve such wealth and to hang onto the majority of it. People don't get rich in a bubble outside of the society in which they live, they make money partly because of the society they live in. Therefore it is not unreasonable for people to contribute to that.
I hope you are not suggesting that my success (such as it is) is in anyway down to anything other that my own personal genius. This is PH, where everyone is a self made man and would have made it even if they'd been brought up in a third world war torn hellhole.If the public want to pay less tax they need to decide which services they no longer want.
What people that have accumulated wealth, should remember is that it is partly because we live in a safe, educated democracy that they have the ability and opportunity to achieve such wealth and to hang onto the majority of it. People don't get rich in a bubble outside of the society in which they live, they make money partly because of the society they live in. Therefore it is not unreasonable for people to contribute to that.
As Monty Python might say, what has this society ever done for me?
TwigtheWonderkid said:
I hope you are not suggesting that my success (such as it is) is in anyway down to anything other that my own personal genius. This is PH, where everyone is a self made man and would have made it even if they'd been brought up in a third world war torn hellhole.
As Monty Python might say, what has this society ever done for me?
Absolutely.As Monty Python might say, what has this society ever done for me?
I'm sure that taxation is very low in Somalia, so it should be idea for all the PH entrepreneurs to go and set up shop and avoid the cruel yoke of sociallist taxation in the UK.
Devil2575 said:
Toltec said:
A well run state should not need to strip the assets of its citizens in order to maintain itself.
The state isn't maintaining itself, the state is paying for things that by and large the voters want.If the public want to pay less tax they need to decide which services they no longer want.
What people that have accumulated wealth, should remember is that it is partly because we live in a safe, educated democracy that they have the ability and opportunity to achieve such wealth and to hang onto the majority of it. People don't get rich in a bubble outside of the society in which they live, they make money partly because of the society they live in. Therefore it is not unreasonable for people to contribute to that.
Jasandjules said:
This is a straw man argument. There are many ways in which millions and billions of pounds can be saved by the state. There is a LOT of waste.
Yes, most of the waste is the money that senior civil servants get paid screw things up spectacularly or "consultants" who are neither productive or required. Jasandjules said:
Devil2575 said:
If the public want to pay less tax they need to decide which services they no longer want.
This is a straw man argument. There are many ways in which millions and billions of pounds can be saved by the state. There is a LOT of waste. The point is we vote in political parties. If we don't like how they spend the money they raise through taxation then vote for someone elses.
Of course there is a lot of waste. There is waste in large companies, and even the smallest state is going to be vastly bigger than the biggest companies. To expect there ever to be zero waste is simply impractical.
The reality is that if we wish to pay less tax then the state needs to do less.
Burwood said:
Yeah like the NHS can't save a bean. What was the telephone number in savings considered feasible. We need far more austerity, pension reform. 40% of council tax pays the staff pensions. Madness.
34% by 2019 IIRChttp://www.thisismoney.co.uk/money/news/article-30...
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