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

Maisie, your situation would be true for many people living outside of the SE - not because you have contributed less, or for anything other than the fact that there is entrenched inequality.

I just looked up the figure out of curiosity, Dd. I have no particular axe to grind and for all I know our property might fetch more than twice its current inflation figure if it were to be put on the market.

I know we could never have bought it for that price if we lived further south, and it would probably be valued at 7 figures now, but we wouldn't have bought it at all in those circumstances, we stretched ourselves as it was.

Germanshepherdsmum

So long as they haven’t made their money through criminal activity, there’s nothing wrong with some people having ‘far more than most of us will get anywhere near’ Maizie.

Do you know what, GSM. If you read my post very carefully you will find that I didn't say anything at all about it being 'wrong'.

I was just making an observation because so many people on this thread seem overly worried about something that will probably never apply to them.

MaizieD

Everyone seems to have missed the post about the extra £175,000 allowance for a residence.

Which makes the allowance on a house at least £500,00.

As it seems to be the inflated value of their houses that most posters seem to be worried about perhaps they should bear that in mind. And if the property is jointly owned then the total allowance would be £1million.

Haven’t missed anything regarding IHT

We are in the process of sorting out our finances, and we will do everything legally possible to ensure our children and grandchildren inherit without the added pressure of IHT.

I know you didn’t say it was wrong Maizie and I didn’t say that you did, if you read my post. However there seems to be a serious dislike of lawfully acquired wealth and the desire to retain it,
Indeed many do make a fuss about something which will probably not apply to them. It will apply to my and my husband’s estates as the law currently stands. We have both paid income tax at the highest rates during our long working lives and continue to pay a hefty amount now. As far as I’m concerned we have more than done our bit to help those worse off and we continue to do so. If wanting to pass on to our family and chosen charities upon death what the taxman has thus far allowed us to retain makes me ‘nasty’, so be it.

MaizieD

Everyone seems to have missed the post about the extra £175,000 allowance for a residence.

Which makes the allowance on a house at least £500,00.

As it seems to be the inflated value of their houses that most posters seem to be worried about perhaps they should bear that in mind. And if the property is jointly owned then the total allowance would be £1million.

MaizieD Everyone seems to have missed the post about the extra £175,000 allowance for a residence.

I didn't, doubt many missed that fact.

I doubt many miss much of what pertains to them. Land has allowances as well, doesn't apply often, many people don't care or notice. Those of us who know and care - we don't miss that fact.

All I can say is,, whoever you are you cannot choose the family into which you were born, you can't help your provenance, wealthy or not. My mum lived on Richmond Hill overlooking the park, probably worth a couple of million today. I can supply the address, the date of sale and no doubt there is a record of the inheritance tax paid.
But that's it from me.
This time round it ain't going to happen like that.

Grannygravy, you are not quoting me, I was quoting Grantenow

I didn't, doubt many missed that fact.

If they didn't miss it, Norah, why were they still talking about £325,000?

M0nica

*Grannygravy*, you are not quoting me, I was quoting Grantenow

Sorry

Possibly, Maizie: because the value of their houses is too low for them to benefit from the additional residence allowance.

I didn’t know about the additional amount until today and it will help us. Am I understanding correctly that the £325,000 is increased to £500,000 if the house you are living in is your residence? And that this £500,000 is transferable to the spouse upon your death, bringing the total amount of value before inheritance tax is applied, to £1000000?

Germanshepherdsmum

I know you didn’t say it was wrong Maizie and I didn’t say that you did, if you read my post. However there seems to be a serious dislike of lawfully acquired wealth and the desire to retain it,
Indeed many do make a fuss about something which will probably not apply to them. It will apply to my and my husband’s estates as the law currently stands. We have both paid income tax at the highest rates during our long working lives and continue to pay a hefty amount now. As far as I’m concerned we have more than done our bit to help those worse off and we continue to do so. If wanting to pass on to our family and chosen charities upon death what the taxman has thus far allowed us to retain makes me ‘nasty’, so be it.

As I said, your views of others do not do you any favours.

I imagine we have all paid the income tax due on our earnings whether greater or less than yours. I also imagine that we have all paid the taxes when money is transferred from one person to another, such as VAT or stamp duty. This is just another tax on a transition.

Yes, correct maddyone UNLESS your main residence is worth more than £2 million.

I believe around £7 billion worth of inheritance tax is now handed over to HMRC each year.

DaisyAnne the thing is, occasionally people do get spiky about the amount of money others inherit, and GSM touched on this.

I remember crying in my early 20s when a "friend" said I was born with a silver spoon in my mouth when my mum died and left me her estate. That "friend's" mum is still alive today, so she has had her mum 40 years more than I have. Money has no meaning.

Inheritance tax is not a competition as to who pays the most. I honestly believe we have not seen any unpleasantness from anyone towards anyone on this thread. Let's leave it so.

Speak for yourself! I think many homeowners will be dragged into this unfair tax, if they haven’t already had to sell up to pay for care. You pay tax throughout your life and then to allow the government to dip into what you’ve scrimped and saved for is robbery.

I think that taxing savings is more unfair, really. They represent money belonging to the saver, for which they (usually) have worked and been taxed on already, yet they get taxed over a certain amount, presumably as interest on savings is seen as unearned income.

I see that as more unfair than taxing inheritance which has not been worked for by the recipient, (and in the case of housing often a lot of it has not been worked for by the deceased either). Taxing unearned income of all kinds seems to me a much better system, whether that is inheritance, income from rent, lottery winnings or whatever.

GrannyGravy13

£325,000 doesn’t buy a two bedroom flat in my vicinity.

In my area it doesn’t buy a bedsit with the result that my adult sons have had to move way out of London/into a pretty rough bit when by they would rather have stayed in the area they grew up in. Don’t know what the answer is.

If you have never experienced it you cannot possibly know how heartbreaking it is to know that someone has worked all their lives to provide for their family only to have an enormous portion of it taken by the government. All this at a time when you are grieving for a loved one. The amount my family paid would have bought all five of my father’s daughters a reasonable pension when none of us had had the opportunity to pay into one when we were younger. And it’s all very well saying you can give it away and live for seven years but which of us knows the hour of our own death. You can live six years and three hundred and sixty four days after the gift and still pay exactly the same amount of tax.

The additional £175 000 from a residential property can only be passed on to a direct descendant. Single people with no children only an allowance of £325 000 no matter how many hard up nephews and nieces they have.

Doodledog

I think that taxing savings is more unfair, really. They represent money belonging to the saver, for which they (usually) have worked and been taxed on already, yet they get taxed over a certain amount, presumably as interest on savings is seen as unearned income.

I see that as more unfair than taxing inheritance which has not been worked for by the recipient, (and in the case of housing often a lot of it has not been worked for by the deceased either). Taxing unearned income of all kinds seems to me a much better system, whether that is inheritance, income from rent, lottery winnings or whatever.

I love to read what you post so eloquently, even handed, well thought out - even when I disagree, as now.

I'm not able to see a difference between "unearned" interest, rental income, housing appreciation, inheritance -- and working income.

It seems to me that my husband works and earns money. Invests and earns money. Could let out homes and earn money, could sell up the homes and earn appreciation. We've not inherited - but someone paid taxes on everything they leave in their estate. Why the need to excessively tax again?

I understand IHT may well go up, but I'd rather the bands on income tax changed to say 20, 30, 40, 50% in an ever upward curve.

someone paid taxes on everything they leave in their estate.

Not necessarily (but thank you for your kind words ) . As we've established, someone could inherit up to a million pounds without paying tax on it. Similarly, other than stamp duty if you sell and buy another one there is no tax on sitting in a house which is appreciating in value year on year either.

GrannyRose I was reading about single (or childless) people getting less of an allowance recently. It does seem very unfair, I agree.

I think people are against it as we all know that the money would not be used wisely, it would not be used to help buffer car costs or put back into the NHS. It would be wasted on other areas such as HS2 etc. I have no-one to leave my estate to but I don't want the government to have the money as it would be wasted. History shows us that is the case so I have no faith it would change in the future

Perhaps because we feel it is grossly unfair that those of us who had parents or other relatives who were able to save, and who had been taxed on the income they were saving out of, should be punished because our family was so fortunate, or provident, whichever way you look at it.

Also death duties when they were introduced were part of the political climate that made class hatred into an issue that has plagued British during most of the 20th century.

Drop inheritance tax, after all the benificiaries may well not be as well-off as the relative who left them the money, and tax the people who actually earned incomes the rest of us never will have a chance of, while they are still living and working.

GrannyRose15 you have my sympathy and I totally agree with your sentiments that as no one knows when their time is up, it’s sometimes difficult to plan your finances in good time. Many of us have the fear of ‘will I have enough for my old age’ also some have hopes that when they retire they will use some of it on special holidays, or other aspirations.

Unfortunately things can happen out of the blue health wise and put a stop to fulfilling aspirations, life can be cut short at the drop of a hat!
Look at what happened during Covid. Many of us confined to our houses restrictions on our travel no opportunities for people to spend much accrued saving etc!

Now interest rates on savings have risen so their savings will rise faster.

Gifting to children isn't as easy as it sounds. If you do this you have to be sure to pay a fair rent if you still live in the property and then your children have to be taxed on the rental income they receive.
The other dreadful thing imo ( apart from the very unfair tax) in the first place) is that the tax has to be paid by the inheritors BEFORE they are able to receive any inheritance which probably means them taking out some sort of loan in the interim which again will cost them.