IHT- how to avoid if you have enough wealth

It most likely would not have done, HMRC made errors in the handling of the case, yes, they are human and do make mistakes.

Our accountant is worth every £

Our estate will be liable to IHT and beyond giving children odd sums at various times, we are doing nothing to avoid it.

We have both had fortunate lives, passed our eleven plus, went to university with maintenance grants, had good careers and confortable retirements. All in a country where the rule of law prevails. We are quite willing for IHT to be paid on our estates after our deat. We received so much, we are happy to give back.

Good post, M0nica.

You can't just avoid it. Wouldn't want to anyway. Far better to pay tax on death than during lifetime!

Every single penny I have has been taxed, I see absolutely no reason why it should be taxed again on my death.

GrannyGravy13

Every single penny I have has been taxed, I see absolutely no reason why it should be taxed again on my death.

Very true.

GrannyGravy13

Every single penny I have has been taxed, I see absolutely no reason why it should be taxed again on my death.

Not quite. Your house will no doubt have increased in value over the period of your ownership without you doing a huger amount of work.

As I have said before we bought a wreck in Brixton in 1979. It was condemned and my DH spent the next 7 years renovating it. We sold it in 1968. If we still owned it, there is no doubt that we would have had to carry out repairs and decorations between then and now. But it is currently worth between £1.25m and £1.5m.

There is absolutely no way in which you or anybody else can say that we earned that money.

We didn't keep upsizing. We had friends who did and their initial purchase will have probably have grown even more but only part of that growth will ave been due to their hard work.

Dinahmo well a couple of points spring to mind - it was hard work saving for a deposit on our first house. We went without quite a bit to find enough money to put down. Also it was fairly touch and go on a single income- husband worked and I stayed home with our children- when mortgages rose to 15 percent. Easy to forget and rewrite history. Although of course it’s quite possible now to make a loss on buying and selling flats (first purchase) and there’s no tax relief on that.

I’m in the lucky position that although we own our house and additionally have some money set aside which keeps us very comfortable, we simply don’t have enough assets to pay IHT. I feel like you GrannyGravy, in that if we had sufficient funds to attract IHT, I would do everything legally in my power to prevent any government getting their hands on it. We worked hard to achieve what we have achieved, and to set our children on the road to successful lives, and of course we paid our taxes and still do, and anything that maybe left when we die is for our children, not the government! And I don’t give a damn about the profit our house has gained over the 35 years we’ve lived in it, everyone else’s house has gained value too, and I don’t expect that profit to be used for causes I don’t support ie putting migrants in hotels.

ronib

Dinahmo well a couple of points spring to mind - it was hard work saving for a deposit on our first house. We went without quite a bit to find enough money to put down. Also it was fairly touch and go on a single income- husband worked and I stayed home with our children- when mortgages rose to 15 percent. Easy to forget and rewrite history. Although of course it’s quite possible now to make a loss on buying and selling flats (first purchase) and there’s no tax relief on that.

Wasn't it for most of us? My DH worked 7 days per week during most of the 7years that we owned it - either on his restoration work or on the house. I worked out that it would be cheaper for him to work on our house rather than work at his business and pay tax and then pay builders etc out of taxed income.

It was our first house, which we bought when we were 32 years old. We had been living in London and paying rent for about 12 years. So yes, I do know how hard it is to save for a deposit. In our case it was 25%.

I'm not quite sure how I'm re-writing history.

Since you lived through the 15% mortgage interest period you must remember that many people were in negative equity for a time. The ones who lost out were the ones who had a reason to sell, such as moving for work and they unfortunately would have sold at a loss. The majority sat it out until prices rose. The same will apply now to those whose flats have gone down in value.

Do people think that those people with nothing, didn't work hard - the same as anyone else.

Even those with nothing to show for it (maybe especially those) can have worked extremely hard.

There is a lot of smugness around "hard work" it seems.

Just saying.

I feel, like M0nica, that those that have to pay it are actually the lucky ones.
Same for higher rate income tax and so on...

Dinahmo we have spent double the amount we payed for our house on renovations inside and out. All of this out of our money that has been taxed.

I really do not agree with your argument that just because our home might have risen in value it should be taxed on our death.

We made sacrifices over the years as have many others, our choice I know, but it’s a big fat NO to Labour increasing IHT.

NotSpaghetti I am not smug

It would have been so much easier if we hadn’t decided to set up our own business. I could have stayed at home and raised our five children. Instead we worked 6/7 days a week, juggling children, homework and all else family life entails with no relatives nearby to help.

I am definitely not smug, exhausted definitely!

Labour increasing IHT?.

They probably won’t, more likely IHT will remain frozen
They might withdraw the extra allowance for couples that took it up to nearly £1m.

Most of this speculation has been about those very wealthy who use loopholes/trusts to avoid/evade IHT

People seem to forget that if they paid a mortgage over 25 years their house cost a lot more than it said on the deed!Sometimes several times the cost

A lot of people who have 'made' a lot of money on their houses were given any years of tax relief on mortgages, so maybe it's only fair that they pay it back in the form of IHT?

M0nica

Our estate will be liable to IHT and beyond giving children odd sums at various times, we are doing nothing to avoid it.

We have both had fortunate lives, passed our eleven plus, went to university with maintenance grants, had good careers and confortable retirements. All in a country where the rule of law prevails. We are quite willing for IHT to be paid on our estates after our deat. We received so much, we are happy to give back.

Well said MOnica I completely agree. I cannot see how progress can be made on reducing the number of people living in poverty in society (including those who are working extremely hard but not being paid much!) if everyone tries to avoid tax. I know it is not illegal to do so, but I think it is immoral.

choughdancer

M0nica

Our estate will be liable to IHT and beyond giving children odd sums at various times, we are doing nothing to avoid it.

We have both had fortunate lives, passed our eleven plus, went to university with maintenance grants, had good careers and confortable retirements. All in a country where the rule of law prevails. We are quite willing for IHT to be paid on our estates after our deat. We received so much, we are happy to give back.

Well said MOnica I completely agree. I cannot see how progress can be made on reducing the number of people living in poverty in society (including those who are working extremely hard but not being paid much!) if everyone tries to avoid tax. I know it is not illegal to do so, but I think it is immoral.

I completely agree. with both these posts.

One thing we’re doing legally, is putting a fair bit of cash into S&S ISAs for the Gdcs. They will have access at 18, which is slightly worrying - eldest is now 9, dh and I will be 84 and 85.

So in case we’re gone by then, TBH not unlikely, I shall be leaving letters pleading with them not to blow the lot!

I agree 100% with MOnica and NotSpaghetti (though complacent might be a better word than smug).

From the most self-centred point of view the best way to secure a better world for everyone's great-grandchildren will be to have better funded public services and that means our generation contributing fairly.

Don't know if it would apply to me, but if it did I would want it to go to my family, I've paid taxes earning it and saving it and agree with Maddyone, the government waste money on things I don't agree with. I was left with two children to bring up, juggling jobs, no holidays through their childhood as friends in same position went on benefits. In those days you couldn't get money off a spouse if they hid their assets or disappeared and you hadn't the money to find them, people smoke and drink and take foreign holidays, that's their choice why should those that don't be penalised? Two people on exactly the same income will spend differently.

Perhaps income tax could have better bands/thresholds. Move the bottom band to 20k and put in a 50% rate, allow people to pay now. Money for the government now, not after people die.

Earnings are taxed, why tax again at death?

I think the argument about avoiding taxes because of governments spending money on things we don't agree with is dangerous, as well as a bit childish.

If enough people don't like what a govt spends money on it can be voted out of office in 5 years. Until then we put up with it as the alternative is anarchy.