What's the logic of inheritance tax?
Discussion
Message for JSG
Ok so maybe lots of money shouldnt be passed down.
But surely the amount of beneficaries should have an effect on the threshold.
If I gave 270000 to 10 people its 27000 each, but if I gave it to my only son then it is 270000 just for him.
Surely this is unfair to children with siblings?
Ok so maybe lots of money shouldnt be passed down.
But surely the amount of beneficaries should have an effect on the threshold.
If I gave 270000 to 10 people its 27000 each, but if I gave it to my only son then it is 270000 just for him.
Surely this is unfair to children with siblings?
bigbaddom said:
Message for JSG
Ok so maybe lots of money shouldnt be passed down.
But surely the amount of beneficaries should have an effect on the threshold.
If I gave 270000 to 10 people its 27000 each, but if I gave it to my only son then it is 270000 just for him.
Surely this is unfair to children with siblings?
I may be missing your point, and therefore I appologise, but surely the point of a will is as its name implies it's your will, therefore on your death how your assets are divided up is up to you, it most certainly does not have to be fair and often is not.
People often play the fairness card and challenge wills completely forgetting that fact that the deceased may have never wanted them to get a single penny.
bigbaddom said:
Message for JSG
Ok so maybe lots of money shouldnt be passed down.
But surely the amount of beneficaries should have an effect on the threshold.
If I gave 270000 to 10 people its 27000 each, but if I gave it to my only son then it is 270000 just for him.
Surely this is unfair to children with siblings?
Absolutely. If what you're saying is that it's fairer for the recipient should be taxed on an individual threshold (CGT), rather than the deceased being taxed on the whole thing, then absolutely... if, say, you had 500,000 children (don't ask!
), then it doesn't seem fair that giving each of them £2 should incur a huge chunk of tax! 
Interesting figures to wind us up some more:
Sole parent of 5 kids dies, estate £460k, Inland revenue gets more than each kid.
Sole parent of 4 kids dies, estate £530k, Inland revenue gets more than each kid.
Sole parent of 3 kids dies, estate £710k, Inland revenue gets more than each kid.
Sole parent of 2 kids dies, estate £1580k, Inland revenue gets more than each kid.
Sounds very fair.
Ivan
Sole parent of 5 kids dies, estate £460k, Inland revenue gets more than each kid.
Sole parent of 4 kids dies, estate £530k, Inland revenue gets more than each kid.
Sole parent of 3 kids dies, estate £710k, Inland revenue gets more than each kid.
Sole parent of 2 kids dies, estate £1580k, Inland revenue gets more than each kid.
Sounds very fair.
Ivan
pdV6 said:
Don't get me started on this. 13 months in and I'm still fighting probate.....
"Can you prove he's dead"
"Well, be burned him to ashes, that's usually a good sign"
Get ready for the long haul, then. We think that my mother-in-law's probate is fainally settled to the satisfaction of the IR (54 months after she passed on), but we're still getting bills for interest that we haven't incurred that have to be sent back and sorted every time.
Bunch of complete feckwits at the IR, if you ask me.
Oh bloody hell, really?
I've got a buyer for the house, the rest of the estate is sorted I think and apart from a couple of memebers of extended family trying to cause trouble it *should* be reasonably easy from here on in.....
...I think....
:superlightr said:
Dont mess with the IR - a bigger ton of bricks will land on your head then a ton of bricks from anyone else.
....except the VAT man who at the moment is still H M Customs but will soon be IR...now THAT is gonna be really scary
>> Edited by vetteheadracer on Thursday 7th October 14:23
Mr E said:
Mr E said:
Don't get me started on this. 13 months in and I'm still fighting probate.....
"Can you prove he's dead"
"Well, be burned him to ashes, that's usually a good sign"
Get ready for the long haul, then. We think that my mother-in-law's probate is fainally settled to the satisfaction of the IR (54 months after she passed on), but we're still getting bills for interest that we haven't incurred that have to be sent back and sorted every time.
Bunch of complete feckwits at the IR, if you ask me.
Oh bloody hell, really?
I've got a buyer for the house, the rest of the estate is sorted I think and apart from a couple of memebers of extended family trying to cause trouble it *should* be reasonably easy from here on in.....
...I think....
If its a fairly straightforward estate (house, bit of cash, a few shares - that kind of thing) it ought to go through pretty smoothly.
In a changing housing market, it can get tricky because you have to declare a valuation for the property for the purposes of the IHT200 submission but if the value changes much by the time the property is sold, you'll have to declare a capital gain / loss, with the tax implications that involves.
Same is true for investments.
In our case, the rising market made a huge difference to the value of the property but over the same period the shares did very badly. Net result was a capital gain, so 4 siblings each had an allowance for CG to use up in order to reduce the overall tax burden. Everything done above board and on-time to the IR's instructions, but still the IR managed to cock it up repeatedly
pdV6 said:
But how do they stop you? Surely if its taxed income you can do what you like with it? And does it only cover cash or investment holdings as well.
They don't "stop you" as such, rather they calculate how much you owe them in IHT after the event, even if you have nothing left with which to pay the tax bill.
Yes, everything is covered, with certain exceptions (wedding costs being one). As my mother-in-law passed on very shortly before our wedding, it may or may not have been the case that our entire wedding was paid for out of her estate (for tax purposes), never mind the fact that my parents were footing 1/2 the bill.
(note, this could all be a theoretical exercise and may have no basis in truth, for any IR personell who may be tuning in...)
Ah see i know that already, but Wackys post seemed to imply that this applied generally and not just to Inheritance tax. Like if i gave my Son 100K.. (I'm only 25 and don't have a sone by the way) there would be some tax liablity.. for him or me immidiately
love machine said:
What's the proforma with valuations. How do the IR get every last buck? Surely this itself is an area for fudging?
There's no way anything like this can be completely accurate. How many people are, for example, going to disclose the value of things which aren't registered or recorded, like jewellery, random antiques and so on for the purposes of probate value? I know that the IR man isn't going to come around and value the contents of the property...
Trommel said:
There's no way anything like this can be completely accurate. How many people are, for example, going to disclose the value of things which aren't registered or recorded, like jewellery, random antiques and so on for the purposes of probate value? I know that the IR man isn't going to come around and value the contents of the property...
Its not quite that easy. If something is not listed in the will it goes to the nearest living relative, so you risk a court fight between your beneficaries unless it is listed in your will, and if its listed in the will it will be valued.
pdV6 said:
In a changing housing market, it can get tricky because you have to declare a valuation for the property for the purposes of the IHT200 submission but if the value changes much by the time the property is sold, you'll have to declare a capital gain / loss, with the tax implications that involves.
Same is true for investments.
Thankyou sir - that's an excellent point and one I hadn't considered. Dammit.
About 6 months since the valuation, and I belive the offer the estate has accepted is slightly more.....
Grrrrrrrrrrr.
Mr E said:
Thankyou sir - that's an excellent point and one I hadn't considered. Dammit.
About 6 months since the valuation, and I belive the offer the estate has accepted is slightly more.....
Grrrrrrrrrrr.
Grrr indeed. In our case the difference between the (genuine) valuation and final sale price was into 6 figures! Crazy housing market
Plotloss said:
If your kids were to register a charity and then you gifted the estate to that charity would that be a way around it?
You can take 70% as costs legally with a registered charity so thats a saving of 10% which is better than nothing...
Or get yourself ordained as a minister/start your own religion has certain tax benefits IIRC...
Instead of buying a big f
k off house, buy a small farm and try to take advantage of the exemption from IHT that is enjoyed quite legitimately by farmers.
Otherwise, get out of the South, buy a perfectly nice, but modest house in Lancashire for £250,000 and give all the rest away seven years before you snuff it.
How do you know when you are going to drop dead?
Look at your ancestors. My Dad died at 63, his father was only in his 50s. In consequence, I don't have a pension, just shit loads of life insurance and the expectation of a modest inheritance.
It is my intention to make sure my net worth does not significantly exceed the IHT limit. Any surplus I shall gift to my daughters sooner rather than later.
My elderly mother is sitting in a big house which carries a potential IHT hit of £80,000 upon her demise.
Am I resentful? Well, yes and no. The value of the property has increased by far more than £80,000 in the last couple of years, so I keep the liability in perspective.
I have to say that the loss of my remaining parent will completely trivialise the fact that there is a tax liability.
If you could give me my Dad back, Gordon can have the fuing lot.
Cheers
Pat
k off house, buy a small farm and try to take advantage of the exemption from IHT that is enjoyed quite legitimately by farmers. Otherwise, get out of the South, buy a perfectly nice, but modest house in Lancashire for £250,000 and give all the rest away seven years before you snuff it.
How do you know when you are going to drop dead?
Look at your ancestors. My Dad died at 63, his father was only in his 50s. In consequence, I don't have a pension, just shit loads of life insurance and the expectation of a modest inheritance.
It is my intention to make sure my net worth does not significantly exceed the IHT limit. Any surplus I shall gift to my daughters sooner rather than later.
My elderly mother is sitting in a big house which carries a potential IHT hit of £80,000 upon her demise.
Am I resentful? Well, yes and no. The value of the property has increased by far more than £80,000 in the last couple of years, so I keep the liability in perspective.
I have to say that the loss of my remaining parent will completely trivialise the fact that there is a tax liability.
If you could give me my Dad back, Gordon can have the fu
ing lot. Cheers
Pat
vixpy1 said:
Ah see i know that already, but Wackys post seemed to imply that this applied generally and not just to Inheritance tax. Like if i gave my Son 100K.. (I'm only 25 and don't have a sone by the way) there would be some tax liablity.. for him or me immediately
Sorry I am a bit late returning to this thread as I have been out all day....
If you gave your son 100k tomorrow, as a gift, as far as I understand it, you could deduct the first 3000, backate this a year making 6000 in total..
This would be exempt from any tax....
Assuming the other 94,000 pounds was added to the offsprings other income, after his/her basic allowances were taken into consideration, this would be treated as earnings and taxed at 40%.....
If this were not the case, everybody would be giving away their assets to their children on their deathbed......
Anybody remember Pat Phoenix from Coronation Street?? (Elsie Tanner)
Well, she Married Tony Booth, (Scouse git from "Till death do us part") and Cherie Booth's father), when she had two or three hours to live, so her considerable assets would be legally transferred over to him (her new husband) to avoid crippling tax bills.......
Wacky Racer said:
Sorry I am a bit late returning to this thread as I have been out all day....
If you gave your son 100k tomorrow, as a gift, as far as I understand it, you could deduct the first 3000, backate this a year making 6000 in total..
This would be exempt from any tax....
Assuming the other 94,000 pounds was added to the offsprings other income, after his/her basic allowances were taken into consideration, this would be treated as earnings and taxed at 40%.....
If this were not the case, everybody would be giving away their assets to their children on their deathbed......
Anybody remember Pat Phoenix from Coronation Street?? (Elsie Tanner)
Well, she Married Tony Booth, (Scouse git from "Till death do us part") and Cherie Booth's father), when she had two or three hours to live, so her considerable assets would be legally transferred over to him (her new husband) to avoid crippling tax bills.......
Yes, but even if you give away your assets to your child, if it up to 7 years before you die, they still have to pay IHT. So that covers that.
I'm still not convinced that in a straight gift of assets worth 100K between relatives (is that the difference, assets vs cash perhaps) the benefactor has to pay tax .
We need an expert here!
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