To not understand this at all ( inheritance tax related)

this topic is being discussed on mumsnet too
guess what - they are mostly all in favour as their houses (must all live in the south east) are worth SO MUCH but it is all hard earned and inheritance should not be taxed twice (house price gains are NEVER taxed on principal residence) - I despair at how selfish a whole cohort of well-heeled people can be - not one myself.

the link
www.mumsnet.com/Talk/am_i_being_unreasonable/2353905-What-are-the-Tories-thinking-with-insane-1-000-000-inheritance-tax-threshold-proposal-for-family-homes?

mollie The tax allowances are per person, ie treating individuals fairly. I don't think the government can be blamed that there is only you in your situation. You would still get the family home allowance of £175,000 plus the allowance of £325,000. You can't expect to pass your allowances on to a spouse/partner if none exists.

Do you know how to copy and paste posters' names? If not jbf is fine.

I had a look at Rightmove the other day.

In the London suburb where we used to live, what were ordinary 3 bedroomed semi-detached houses with an extension or two providing eg another bedroom and extended kitchen are now going for £1.2 million.

It is the skewed house prices that are the problem.

These would be considered normal family homes in most areas of the country, not 'mansions', many bought by newly married couples 40 or 50 years ago who extended to accommodate growing families and have no wish to move in their old age - or could not afford to do so. They will be living on pensions and savings (if they have savings) and they are not necessarily 'wealthy'.

Tax has been paid on earnings to pay the mortgage and loans for the possible extension, stamp duty, and mortgages charged at 14.5% in the past.
Bought and paid for with hard-earned taxed money. No-one expected house prices to rise so dramatically in certain areas.

There is no inheritance tax at all in many other countries.
It is stealing from the dead imo.

Tax evaders are the ones to chase.

but it is not the people who worked and paid the mortgage (to put it bluntly they are dead) who have received the money but their beneficiaries who have not done a thing to 'earn' that money. it is not stealing from the dead at all (where on earth do you get that idea) it is taxing unearned income above a certain amount.
and the argument about no inheritance tax in other countries is a complete 'red herring' Other countries perhaps do not allow things like primary residence being exempt from estate taxes.
the fact that house prices in London are insane and only those already living there can afford to buy should not make this proposal 'right or fair'
the rich just get richer.

Hopefully this will bring down house prices in London.
Those you are talking about, roseq, will have to pay inheritance tax on the £200,000 over the million. If they do not want to pay inheritance tax, then the house could be valued at just under a million.

Anyway, the Tories will not get in, so it doesn't matter. The Labour mansion tax is on those over £2 million.
My house is worth less than £200,000 so it doesn't affect me either way.

rosequartz Inheritance Tax is not payable until a single person or, in the case of a married couple, the remaining spouse dies - it does not financially penalise the owner of the property in any way. It is payable after his/her death and therefore only affects what the beneficiaries receive. I expect all of us want to leave something to our children but surely £650,000 - never mind £1 million - is enough? They will still retain 60% of any amount above that threshold.

Liike you and many other Gransnetters, we have also paid stamp duty, 14.5% interest on our mortgage, etc. etc., but WE paid it - not our children - and while we wish our children to inherit our estate, we believe that if the value of our property exceeds the threshold then it is quite right that Inheritance Tax be payable.

Meanwhile, a growing number of working people may not be able to get a state pension until they are 68. The majority of them will not benefit from a substantial inheritance. Many of them are paying extortionate rents which prevent them from ever being able to save to buy a home of their own. This concession to the better off will decrease the tax intake and inevitably affect the less well off. It is just unfair.

Figures from the Office for National Statistics show that 50% of those that receive an inheritance receive less than £10,000 and only 1 in 10 beneficiaries inherit £125,000 or above. It is also stated that "Rates of inheritance were higher for individuals living in households which already had the highest level of wealth".

This is echoed in an article in The Economist:

Many people pay lip service to meritocracy but get very het up about inheritance taxes, or death taxes as they like to call them. It is often said that inheritance taxes represent double taxation but in many cases that isn't true; for middle-class people, their biggest asset is usually their home on which capital gains tax is not paid. Similarly, business owners only pay capital gains tax when they sell; by definition, if they are passing a company on to their heirs, they have not sold

If one assumes that an economy functions best if the most talented people rise to the top, then inherited wealth rigs the deck. There is a lottery effect; if your parents owned property, or die early (before they spend their savings on nursing care), then you have a big advantage over others who may be just as hard-working or talented. Wealthy people already pass on a lot of advantages to their children; they can afford better education, and a better environment at home (more books, quiet places to study etc)

History, as well as fiction, suggests that being born to inherited wealth is not normally a spur to greater effort; instead, life is devoted to social display or indolence. The world hardly needs a new class of Bertie Woosters

durhamjen don't count your chickens, today in The Guardian Newspaper no less

Poll takes Tories to 39% ahead of Labour on 33%, as Lib Dem support stays at 8% and Ukip drops back two points to tie with Greens on 7%

A couple has had two people working at two jobs to earn twice the money to buy their house, so they get two lots off the inheritance tax. Each of them gets the same deal as one singleton. I don't see how that is unfair. If the singleton got twice the deal that a married person (one partner of the pair) got, then that would be unfair, and penalise those who have pooled their finances.

Oh, why shouldn't some things be handed down through the generations?! Someone put in some work to get them at some point.

You could go and live in Moscow. Or a kibbutz.

Jbf- who on earth on this thread is saying that things shouldn't be passed down through the generations? The discussion is a little more complex than that

And bloody hell - Moscow as an example? Which millenium are you in?

If HMRC wants a big chunk of the value of the estate (house + cash) as inheritance tax, then the house would have to be sold - so it would not be handed on. Personally, I would really like it if one of my children were to move into my house when I am dead, and carry on using it as the family home it has been for us for 50 years.

Apart from that, the value of my home is part of my legacy (and my late husband's legacy) to my children. It took a long time and a lot of work to pay for it. HMRC didn't do that work.

The chips on the shoulders say it Grannytwice. And I'm in this millennium. (Ok - choose any other repressive state) Moscow was almost a figure of speech. Though I'm not sure how much has changed there.

jingle How can you possibly justify something that will further increase the concentration of wealth (and power) into fewer and fewer hands?

Nobody is suggesting that children shouldn't benefit from their deceased parents'/relatives' estates, just that over and above what - I think anyway - was already a generous limit, a proportion of the money should be taxable in order to benefit society as a whole.

As I've already said, those who own their own homes haven't necessarily worked any harder than any other working person. Nor have they "earned" the sometimes substantial increases in the value of their properties. Our house has increased in value by 20+% over the last twelve months or so - and we've been retired for four years.

Wealth belongs to the family who owns it. And who most likely worked hard for it. I prefer to choose my charitable givings. (I'm sorry if that sounds pompous. And it does)

Trying to think a little bit laterally about this:

People are upset because their children are unable to buy their own properties because house prices have gone up and are not in proportion with wages/salaries any more. I am not an economist so I don't know why this has happened over the last 15 or so years.

People who bought their own property as family homes many years ago have seen the value of them shoot up, particularly in the south-east.

When these people die the value of their property is taken into account when deciding how much tax to pay when the property is sold. At the moment the total of a person's assets over £325,000 is exempt, anything over is taxed at 40%.
A couple can pass their exemption from one to another = £650,000.

This means that a house bought for, say, £6,250 in the late 1960s could be worth £1.2 million now in certain areas.
Because the children of the couple living in this house may well want to stay in the same area, they cannot afford their own house because the prices are extortionate.
If they inherit their parents' house, divide the inheritance between however many offspring, say 3, they still cannot afford to buy a house in the area where they grew because they have paid a lot of tax on their inheritance and there is not enough left to purchase, or even find a deposit, in that area.
If they are allowed to inherit £500,000 from each parent = £1 million then they could possibly afford a house in the area where they grew up.
The new allowance of just £175,000 per person applies to the property only (the home) and not to any other assets.

Some time ago, I knew of a couple who had to pay inheritance tax on a property belonging to his father; they had lived there with father and step-mother for years caring for them. They dutifully paid 40% tax then found within months that house prices had slumped and, had they waited to sell, they would have been liable for much less.

Personally, I don't think inheritance (or estate) tax is fair; tax evaders should be chased up as I said earlier.

Excuse ramblings, just trying to get it sorted out in my mind.

Oh, and house prices have gone down in London and may well continue to do so.

And the very wealthy will not be exempt from estate duty (inheritance tax) as properties over £1 million will start to lose the exemption on a sliding scale. So the very wealthy (who upset so many) will not receive any benefit from this.
But I expect they have put their property into some sort of trust fund and will not pay any tax - or any tax on earnings they used to purchase the property. These are the people who should be targetted, not those who are 'in the middle' because of where they live.

Life ain't fair. Person A is an only child, with an unmarried aunt. So inherits the whole of the 2 estates. Person B has supported their parents the whole of their working life Parents live in rented accommodation. Child inherits nothing.
The people with most money do "inheritance tax planning" to avoid inheritance tax. e.g. putting their second home in their children's names.
Thinking about the people I know - there is huge disparity in what they have inherited/are likely to inherit. Merit and hard work are not part of the equation.
Inheritance tax is designed to collect some money from people who no longer need it. Sounds a great deal to me.

And Jess - to add to the unfairness in your example, Person B is paying taxes which may well be more because the take from IHT has decreased. There could also be Person C whose widowed mother owns her own house, goes into care and the house proceeds go to save the state the costs of care

But I think the people in this group are, in the main, ordinary people who just happen to have bought a house many years ago when house prices were in proportion and are now considered 'wealthy' because of where the house is and what it is worth. It may be their only asset.
These people don't have 'loadsamoney' - they are just folk who have led ordinary lives, mostly in the south-east of England.

Well, I think if we still lived there, I would take out some equity from my £1 million house and go on a world cruise, fulfil my 'bucket list' etc

Unfortunately, many of them may be too frail to do that. I am probably not fit enough but I would darned well try.

Magpie, that was one poll. In the Guardian poll of polls, which included that one, Labour is still ahead, not by much, but enough. The BBC tracker puts them neck and neck, and the Independent/New Statesman has Labour 1% ahead.

Interesting thing in your example, magpie, is that there is only 6% left for all the others, which includes SNP, who are going to get more seats than Ukip and Libdems together. In fact they are going to get enough to put Labour in a winning position.
Did you hear both Osborne and Hunt yesterday, neither of whom could say where their extra £8 million for the NHS was coming from. Osborne was asked 15 times and Hunt a dozen.