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

I agree Norah. I don’t have any worries about a ‘fairer society’ because I’ve paid my taxes all my life and I worked for over 17 years in an inner city school doing my best for my pupils. I also worked in other schools but they were in different areas. In other words I’ve paid my dues to society.

Agreed, Norah.

Given I can't change tax laws, I really don't care if those of you who have Socialist notions give the government all your money and possessions. Truly, give yours to the government, be happy.

All I ask - you don't worry over my home and funds - we give generously to our choice of charities and our children, GC, GGC.

We're not interested to give more to government chosen wastefulness.

Maddyone, ---- we will continue to share what we have with our children without any worries.

Important point, imo. We give very generously to our children, always have done, their needs are all well covered, no worries.

Giving whilst alive is key, to me.

Norah

Joseann

I'm just wondering, if as a mega rich person, all your wordly wealth is held in offshore accounts, does inheritance tax need to be paid then?

My brother, now home after always working in USA, pays taxes here on USA pensions (horrible exchange rate). Oh well, choice made.

I quoted Josann rather than who I intended. Sorry.

I don’t consider we had any good luck in the way it is being suggested. We bought our first house in 1974 when we got married. We had to borrow from the Local Authority because the Building Societies wouldn’t look at us because we were straight from university, well my husband was still at university, post grad. We made no profit when we moved south two years later. We then bought a house in a less than desirable area because it was all we could afford, and we could barely afford that. We never paid less than 8% interest on our mortgage. We moved again when our daughter was born, to a slightly larger house, and again four years later to our current house. Each time we had to pay more and increase our mortgage, which wasn’t easy on teacher’ s pay, although yearly incremental rises helped a bit. When our daughter was five years old I went back to work, and that helped a lot financially, and since my husband worked at an independent school, we were able to send our children there from age eleven (we did pay for that, but reduced fees.) We wanted better opportunities for them than we had had for ourselves. It was very hard working full time with three young children, I was permanently tired, and couldn’t have managed it without school holidays. Unfortunately despite our parents still being alive, we weren’t able to benefit from any childcare because they lived so far away.
No, I don’t believe we worked harder than some younger people today, but we definitely worked harder than others.
We paid for what we own. If we sell our house, we’ll have to pay a similar price to buy another. We paid high interest rates, up to 15%, as others did, we live in our home so it is not providing us with anything other than a home, we do not own a second property, nor do we have any other great assets. I do not agree with Inheritance Tax at all, but thanks to Joseann explaining in an earlier post, I now believe no Inheritance Tax will be payable on our estate, and we will continue to share what we have with our children without any worries.
I still maintain that we worked, paid our taxes, and paid for our property and is is ours and nothing to do with government. So is yours in my opinion.

Depends on where you’re domiciled. Become a Jersey resident if you have the money to be accepted - no IHT.

Joseann

I'm just wondering, if as a mega rich person, all your wordly wealth is held in offshore accounts, does inheritance tax need to be paid then?

My brother, now home after always working in USA, pays taxes here on USA pensions (horrible exchange rate). Oh well, choice made.

Not all differences can or need be leveled out - cookie crumbles.
Which is what I said. That's not my objection - my grumble is with those who insist that their good luck was really 'hard work'. It really wasn't, any more than any inflationary rise in the value of my own house has been earned by hard work - I'm talking generally here.

Doodledog, People who bought 10 or 20 years earlier made even more of a profit and benefited from much lower rates when their mortgages were new and higher, then again from the high rates on their savings when we were paying off ours.

I'm not sure you're correct.

We bought 20 years before you, my grandparents home (and their grandparents before them) for less than £2k at 5% fixed. Obviously, an old home (and it was quite old when we purchased) required many renovations, additions etc, and his wages were £500 a year - total.

Not all differences can or need be leveled out - cookie crumbles.

Mega rich people can find ways around paying all taxes! My SIL owned a flat and a house in London and the very beautiful country home that she lives in currently. Her two children have been given the proceeds from the sale of the London properties and she has transferred the ownership of her country house to her grandchildren, to whom she is paying a very handsome monthly rent. It will all have been done legally with any tax etc paid. BIL is dead and I expect SIL to live for many more years but when she goes I doubt there will be any inheritance tax to pay despite her wealth as it will all have been passed on down the line. And so the money increases and the rich get richer and the poor get poorer!

Joseann

I'm just wondering, if as a mega rich person, all your wordly wealth is held in offshore accounts, does inheritance tax need to be paid then?

If you were “domiciled” in the UK yes, it’s the “non doms” that get the advantage.

I'm just wondering, if as a mega rich person, all your wordly wealth is held in offshore accounts, does inheritance tax need to be paid then?

Good post Doodledog and yes, you're right that's the way the cookie crumbles - on both sides. There is a big difference between the value of a house in London or Cambrige and one in say Sunderland.

I know the animosity some people, (not on this particular thread), feel towards those with large inheritances. I experienced it myself from 21 years on ..... friends commenting about our sending our children to private schools, comments about our holidays, our cars etc. If you didn't embarrassingly explain to new acquaintances, you ran the risk of people questioning behind your back. I knew and understood that some people were struggling really hard with mortgages etc. but I think I would have swapped for that anytime.
Even my unkind MiL was heard to say, Z&Z don't need our help, they've got it all. ALL except practical help and moral support from loved ones course which we desperately needed. They'd let us pay the bills eveytime we went away, even though they could afford it, when it should have been my mum enjoying the grandchildren. Sorry, I've rambled.

As I said before, I recognise that it is hard for some not to feel a bit bitter jealous about others' inherited wealth. I appreciate the chance, like here, to sometimes explain that inheriting a large sum, house or money, especially when very young, isn't everything. It's how you are as a person that counts.

We bought our first house in 1979 and married in 1980 by which time the repayments had doubled. We moved to a bigger place in 1989 as we wanted to start a family and interest rates rocketed again. Having had our fingers burnt we fixed at 16 or 17% for five years, so we’re stuck when they started to fall. That was very hard, as we had two babies by then. By the time the house was paid off and we could afford to save, interest rates were low, and are only just climbing now.

That’s just the way the cookie crumbles, but it’s galling to hear how people who bought their first house even slightly earlier for half the price we did (a friend had an identical one which was exactly half what we paid three years later), claim to have ‘worked hard’ for everything. My friend sold not long after we bought ours (at a 50% profit), moved to just outside of London (with a mortgage lower than ours) and made ££££ just for living there.

Again, that’s life, and I don’t begrudge them at all, but they worked no harder than we did - in fact my friend didn’t work at all for about 30 years after having her first baby, and her husband didn’t have double the salary of either of us- it was just that their outgoings were lower.

People who bought 10 or 20 years earlier made even more of a profit and benefited from much lower rates when their mortgages were new and higher, then again from the high rates on their savings when we were paying off ours. As before, that’s life, but why pretend it all came down to working harder? And for today’s young people it is even worse. No wonder they resent previous generations if the implication is that the high prices the young have to pay for housing is because they are not working as hard as their parents.

There is tax on savings from taxed earnings, so why not on the unearned money from living in a house? I don’t think that the fact that if we buy with a mortgage we pay more than the headline price is relevant really. It’s the gap between the price paid and the selling price for the inheritors that represents the unearned portion, although I can see that it’s not as simple as that if people have bought a ‘do it upper’ or if the increase is based on extensions etc. Much as I understand the desire to leave as much as possible to the next generation, the huge difference between prices across the country is just perpetuated if those whose parents have already made a lot from houses get given free money to keep prices high. The lottery of social care payments works against those outside of areas of high house price inflation too, as there will be less left over after those costs - nothing to do with working hard.

I think we do understand more than we're given credit for.

The total cost of a home purchased in the 1970s was probably about three times the initial price, with interest on loans and other initial charges.

Had all that money been invested in the stock market, it would probably be in excess of the value of that property.

And a lot of hard work to pay the mortgage Bobbysgirl.

Dinahmo

Some of you are still not accepting the fact that most of the increase in the value of the majority of peoples' main investment, ie their home, is not derived from their income or their hard work.

No, you're right,* Dinahmo, I don't accept that statement!
you have your opinion and I have mine. I don't expect you to accept my opinion, nor should I be required to accept yours, that's what makes for a good discussion.
I agree that in areas where property prices are very high, it may well be that the property is the main asset but there must be lots of people who have worked and saved all their lives through hard graft., and their main asset is their savings,
There is a big regional difference in the price of property.
Another thing to remember is yes it was hard work for lots of people struggling to pay a mortgage, it involved a lot of sacrifice to get on the property ladder.

Maybe IHT should only apply where someone has more than one property? The primary residence being exempt.

Norah

Callistemon21

It obviously affected some more than others 🙂

I imagine entirely too low mortgage rates the last many years have led to investors snapping up rent-lets. Perhaps that was true prior to the few high mortgage rate years also.

However, some bought v rented in high mortgage interest times. Affected indeed for that period of time.

Luckily we're quite elderly - mortgage didn't change life negatively.

Back to IHT. If it must change, what is the best way forward?

Now interest rates are creeping up again, buy-to-let may not be such an attractive prospect; houses may be put back on the market and prices may drop.

Back to IHT. If it must change, what is the best way forward?
If not abolished altogether, it should be banded ie the same allowance which should rise with inflation, 20% for the next band, then 30%.

Other countries seem to manage financially without IHT.

Dinahmo

Some of you are still not accepting the fact that most of the increase in the value of the majority of peoples' main investment, ie their home, is not derived from their income or their hard work.

Nor is investment in stocks and shares.
Investment in stocks and shares may have been a better alternative to paying a mortgage over the same period of time.

Taking out a £50,000 mortgage over 25 years at an average of 10% interest rate (for 17 years it was in excess of 10%) means the total repayment would have been £136,305.

I keep saying that, but I don’t think people want to believe it

Some of you are still not accepting the fact that most of the increase in the value of the majority of peoples' main investment, ie their home, is not derived from their income or their hard work.

GrannyRose15

•Norah• the best way to change IHT is to abolish it altogether.

Indeed!

•Norah• the best way to change IHT is to abolish it altogether.