Why are so many people against a tax they will never pay?

The problem is you don't know how much money you're going to need. God willing, you'll be physically and mentally able to stay in your home until you die but if you can't and need to be in a nursing/care home, that money is the difference between somewhere really nice and whatever your LA has to offer.

Exactly Dinahmo you pay tax on what you earn, we had our own business and paid corporation tax, but you don't pay tax on the increase on the value of your home.

I couldn’t agree more Bluefox. I have paid, and continue to pay, a great deal of tax. I consider that what I have left I should be able to leave to my son free from IHT. The State has had its share of my blood over the years.

Hetty58

More people (who are able to) should gift to their children, then survive for seven years. It's just mad, if we don't need it - and they do - to hang onto money and make them wait until we die!

It would help if the amount of £3000 a year maximum gift per year could be increased. It’s been the same for decades.

Juliet27

Hetty58

More people (who are able to) should gift to their children, then survive for seven years. It's just mad, if we don't need it - and they do - to hang onto money and make them wait until we die!

It would help if the amount of £3000 a year maximum gift per year could be increased. It’s been the same for decades.

There are other exemptions - you just have to look on the HMRC website.

Germanshepherdsmum

I couldn’t agree more Bluefox. I have paid, and continue to pay, a great deal of tax. I consider that what I have left I should be able to leave to my son free from IHT. The State has had its share of my blood over the years.

INDEED

We've paid dearly, years on end. No need for IHT.

We will pay inheritance tax and I have never complained about it.

We have been fortunate to have done well in life and also inherited from parents. It seems to me to be absolutely reasonable that people like us should, on our deaths make one final contribution to society by paying a tax on our wealth.

Germanshepherdsmum

I couldn’t agree more Bluefox. I have paid, and continue to pay, a great deal of tax. I consider that what I have left I should be able to leave to my son free from IHT. The State has had its share of my blood over the years.

I'm in complete agreement on this too. We have also paid a great deal in taxes over the years and we are now looking at ways in which we could pass our property on to our son and daughter without it costing them a fortune in further taxation.

M0nica

We will pay inheritance tax and I have never complained about it.

We have been fortunate to have done well in life and also inherited from parents. It seems to me to be absolutely reasonable that people like us should, on our deaths make one final contribution to society by paying a tax on our wealth.

We'll be paying, unless we spend our way out on care etc - however, I see no need for IHT reforms - IHT is high enough.

I have mixed feelings, really. I think that people should be able to leave money to their children (or the donkey sanctuary), but I think that taxation should be used to level out the massive geographical discrepancies that surround house prices.

The cap on care fees is the same across the country, so someone with a house worth £1m in the South will be left with the vast majority of it to pass on, whereas someone who paid £27k in the same year for a similar house in the North could be left with very little to pass on, despite neither having worked for the increase in value, and the fact that wages are generally lower in the North, so the original £27k would represent a bigger percentage for the northerner. Either the care system or inheritance tax (or both) should be changed to equalise things. As it is, the North South divide will continue to widen, as inheritance compounds the existing inequality.

For that reason I think that IHT should be raised on the proportion of the estate over the median average house price, with savings treated separately.

I don’t think many people are against it. I think some people are and the Telegraph is working very hard at making mountains out of molehills.

Perhaps because, unlike income tax, there is only one rate which is 40%, unlike income tax which is banded.
40% is a high rate, higher than any other unbanded taxes.
Many countries do not pay inheritance tax, many more have abandoned it.
If so few pay it, is it worth the bother?

It's a dishonest tax, better to pay a penny or two more on earnings in life than to take such a huge proportion of the estates of the dead.

We have to pay a form of inheritance tax in France. Unfortunately, because we are child free what ever we leave to nieces and nephews or children of friends will be taxed at 60%.
There are some ways to avoid it, by taking out assurances vie for example but all our estates will go to charity - no tax there as long as you chose the right ones.

So you are avoiding Inheritance Tax after all, by leaving all your money to charity Dinahmo. I have never owned a house worth one million, let alone one and a half million, and yes, I have paid all my taxes. I do not intend to leave one penny to be paid as Inheritance Tax because I will have spent and given away enough to ensure I will have no Inheritance Tax to pay. I’ve paid my dues to the government, they won’t get anything more from me.

Every country chooses to tax it's people in the way that works best for it. Inheritance in France is different. Sadly my own mother in the UK refused to allow any of her inheritance to be passed to me in France when I was marrying a Frenchman because she wanted to protect the money she was leaving.

Prices are lower because those that have to sell take what the buyer can afford, higher interest rates mean he can afford less.
Prices will recover when interest rates fall.

As Inheritance only affects the largest estates and relatively few people are affected a the hoo-ha about it seems odd to me. I think it may be that people don't understand how it works. People whose estates will never be affected may not realise that it won't affect them and are getting exercised over a non-event. I heard a piece on the radio where some people seemed to think it was capped at £20000 - and some thought that therefore they lost everything above this sum. This is a bit like the confusion around the fuel cap it seems to me.
If we don't understand a prospective change we are bound to feel discombobulated.

Frankly, those estates subject to it aren’t those of people :hard done by" and the people and charities they love and leave behind still inherit - often a lot.

The wealth that is taxed is actually unearned by its beneficiaries. I think it's OK to tax this unearned income - after all, as said before, its left behind by only the largest 7% of estates.

As M0nica says, It seems to me to be absolutely reasonable that those of us fortunate enough to have left, basically, huge wealth compared to most, should, on our deaths make one final contribution to society by paying a tax on our wealth.

Sorry missed a 0 - £200 000

The £3,000 gift allowance is laughable. My dad will never ever pay IT no where near. But what he does want to do is treat the family to the odd holiday, or pay for gson driving lessons and maybe put towards a car. He bought myself a small second hand car as mine had conked out (it was 17 yrs old) the one we bought is 14 yrs old. So we haven't gone for some luxury car.

Yet the government dictates to my dad who has grafted since he was about 12 yrs old (yes 12 ) why should he not spend his money as he wishes. ( In reasonable amounts if he can afford to) whilst yes at the same time making sure he has enough money if he needs care, which he may well do as he is 87 and suffered with Parkinson for the last 15 yrs) Why must he only be allowed to gift £3,000 explaining this to him is very difficult he is of sound mind but cannot grasp that the gov tell him what to do with his hard earned money. No wonder the older generation kept it "under the mattress" so to speak!

Paying IHT does not preclude leaving money to family and/or favourite causes.

My sister and I still inherited enough money from our father to substantially ease our retirement despite paying IHT because the sale of his house meant his estate became liable to IHT on a small proportion of it.

bikergran, you can gift as much as you like, but if you die within seven years of a gift to one person of over £3000 the money (even if it is spent) will be added to the notional value of your estate, and if the total is then over the IHT amount it will be included in the taxed portion.

That is to stop people from giving everything away on their deathbeds (or on getting a terminal diagnosis) to avoid paying IHT, and like all IHT it only affects those with assets that put them in the top 7%. There are also numerous exceptions to this rule - see here:
www.gov.uk/inheritance-tax/gifts

I do not agree with the fact that the government hasn't raised the inheritance tax threshold for so many years , it's a way of clawing back even more money from the estates of the dead.
People have been encouraged to work and to save and some now find themselves in a position where they will fall into the inheritance tax bracket.
I know there are ways of giving away your money but like bikergran said £3000 a year is laughable.

I understand too you can give away larger amounts, but who can guarantee they will live seven years? so once again it can be clawed back if you are over the threshold. There is a sliding scale whereby the tax payable is reduced by percentages after 3 years, but they're still out to get you!

Good post bluefox I totally agree!

I know there are ways of giving away your money but like bikergran said £3000 a year is laughable.
It is also not true - see my post above. You can give as much as you like, but not in order to reduce the amount left over that may be liable for tax. If the total estate - including gifts above £3k per person per year given away within 7 years of death - is over the threshold, then those gifts will be taken into account when working out the IHT. If it is not, then they won't count.

Doodledog

*bikergran*, you can gift as much as you like, but if you die within seven years of a gift to one person of over £3000 the money (even if it is spent) will be added to the notional value of your estate, and if the total is then over the IHT amount it will be included in the taxed portion.

That is to stop people from giving everything away on their deathbeds (or on getting a terminal diagnosis) to avoid paying IHT, and like all IHT it only affects those with assets that put them in the top 7%. There are also numerous exceptions to this rule - see here:
www.gov.uk/inheritance-tax/gifts

Even so, it has remained at £3,000 for 40 years!

bikergran
Rather like the £10 Christmas bonus, something just quietly forgotten, hoping people will not realise it can be backdated a year, ie if not used in one financial year then £6,000 can be gifted the following year.

I believe the exact amount is £325,000 before inheritance tax becomes payable. No inheritance tax is payable until both the parties in a marriage die, and so the joint amount on the estates of both parties becomes £650,000. If a person owns a fairly modest house in the south and has some savings, the couple will become eligible to pay inheritance tax at 40% after the death of the second partner. A joint estate of £650,000 which includes a house can in no way be described as rich. The argument that any profit on the house had no tax doesn’t hold water. The savings that have been held in an account that attracted no interest, or a minuscule amount of interest, means that that money devalued, but no one is suggesting that tax be paid back to the account holder because their money, on which tax has been paid, is now worth less. It would be ridiculous to suggest this, as it is ridiculous to suggest that tax be paid on the profit on a primary residence. Fine for a second residence, capital gains tax becomes payable anyway.
We are not rich. We own a house and have some savings too.. I have a very small inheritance from my mother’s death. She did not qualify to pay any inheritance tax since my parents were not rich either. It is not selfish to wish to leave any remaining house/money to your children. To suggest it is and that it should be left for the benefit of others, takes no account of ordinary people (we were both teachers) who have worked hard all their lives and bought one house to live in, who have paid their taxes all their lives, and who have received either no, or little inheritance themselves, should then pay further taxes to support others, when they have children to leave it too, in my view is totally and utterly unfair.
If a person is rich enough to own a house worth over one million, then they are very fortunate, but we who do not own such properties, nor any second properties, are entitled to wish to leave our small estates to our own children. There is nothing wrong with that.

Callistemon, just imagine how much a gift of £3000 would buy forty years ago. If people wish to gift to their children it is their right to do so. £3000 is not very much these days.