IHT- how to avoid if you have enough wealth

GrannyGravy13

I never thought the UK would become a country where bettering oneself and accruing savings are viewed as a revenue stream for the Government on your death as opposed to ensuring your heirs will not become dependent on the state…

What is the point!

I think you're becoming a trifle hysterical about this here.

We're not talking about the state confiscating the whole of the whole of what has accrued over your lifetime. There is a sum which is not subject to taxation and after that there is 60% left to your heirs of whatever remains.

As this has been frequently pointed out, this is wealth that your heirs have done nothing to earn themselves and which can no longer be of any benefit to you. I see no reason why the state should not take back a portion of the money that it issued in the first place.

Allira

M0nica the general taxation system should be such that we can afford to educate our young, look after the health of the nation and maintain our public services without robbing graves.

It's a choice - higher taxes whilst you are alive and lower taxes on your estate, borne by you beneficiaries or visa versa. I know which I would prefer.

Dinahmo

Allira

M0nica the general taxation system should be such that we can afford to educate our young, look after the health of the nation and maintain our public services without robbing graves.

It's a choice - higher taxes whilst you are alive and lower taxes on your estate, borne by you beneficiaries or visa versa. I know which I would prefer.

Me too and it's not IHT.

MaizieD I can assure you I am no where near hysterical.

I am however vehemently opposed to the level IHT kicks in and the 40% rate that is imposed.

You are definitely wrong with

your heirs have done nothing to earn themselves

The way IHT is collected is punitive, it’s already been posted up thread in detail.

GrannyGravy13

I never thought the UK would become a country where bettering oneself and accruing savings are viewed as a revenue stream for the Government on your death as opposed to ensuring your heirs will not become dependent on the state…

What is the point!

It's absolute nonsense to claim that heirs become dependent on the state if they don't receive an inheritance. They can do what the majority of the population does and earn their own money without an inheritance.

MaizieD. Not understanding "I see no reason why the state should not take back a portion of the money that it issued in the first place". Nobody issued any money to us we went out and earned it and paid tax on it. It is ours to do with as we see fit!

Allira

GrannyGravy13

I never thought the UK would become a country where bettering oneself and accruing savings are viewed as a revenue stream for the Government on your death as opposed to ensuring your heirs will not become dependent on the state…

What is the point!

Not all younger people are able to afford to buy a property, with rents so high and many do remain single which makes upit even more difficult to purchase on one salary.

If they are fortunate enough to receive a legacy from a parent or relative then that would enable them to get on the housing ladder, give them some security and a cushion so they too will not become dependent on the state, as GrannyGravy13 says.

Of course, they could choose to spend it and blow the lot!

That's drivel! They can do what those who don't have an inheritance do. They don't need a £million to buy a property anyway. And moreover, there are many people without their names on property deeds who aren't dependent on the state.

Faierynan

MaizieD. Not understanding "I see no reason why the state should not take back a portion of the money that it issued in the first place". Nobody issued any money to us we went out and earned it and paid tax on it. It is ours to do with as we see fit!

I'm afraid that's not how an economy works. You have the right to do what you want with it while you're alive. All wealth ultimately belongs collectively to the state. States decide how it is distributed through taxation.

Faierynan

MaizieD. Not understanding "I see no reason why the state should not take back a portion of the money that it issued in the first place". Nobody issued any money to us we went out and earned it and paid tax on it. It is ours to do with as we see fit!

Where do you think that money comes from in the first place?

Who has the only right to issue money?

It’s news to me that ‘all wealth belongs collectively to the state’!

GrannyGravy13

MaizieD I can assure you I am no where near hysterical.

I am however vehemently opposed to the level IHT kicks in and the 40% rate that is imposed.

You are definitely wrong with

your heirs have done nothing to earn themselves

The way IHT is collected is punitive, it’s already been posted up thread in detail.

If your heirs have 'earned' the money why do you still have it to 'leave' to them?

Witzend

It’s news to me that ‘all wealth belongs collectively to the state’!

I think we might be living in an alternative state to some, Witzend.

Why not go after the wealthy tax evaders who hide their money away and evade paying taxes on earned income yet may well benefit from public services?

Thst coul bring in a shilling or two.

MaizieD because they have and continue to contribute towards the success of our family business, which we all benefit from on a daily basis.

I could be open to the idea of a sliding scale of IHT starting at 10% on £1.5 million and then rising by 5% on each million until £5 million and then 40% on everything above.

This to me would be so much better than the current system.

Also MaizieD it is my money earned legally, taxes paid along the way at varying rates.

The Government has not earned it, it has benefited from my earnings considerably throughout my life.

growstuff

GrannyGravy13

I never thought the UK would become a country where bettering oneself and accruing savings are viewed as a revenue stream for the Government on your death as opposed to ensuring your heirs will not become dependent on the state…

What is the point!

It's absolute nonsense to claim that heirs become dependent on the state if they don't receive an inheritance. They can do what the majority of the population does and earn their own money without an inheritance.

I don't understand this. If you are not heir to a small fortune, you crack on and work I think?

People bettering themselves are often better to start with.

GrannyGravy13

Also MaizieD it is my money earned legally, taxes paid along the way at varying rates.

The Government has not earned it, it has benefited from my earnings considerably throughout my life.

The government issued it, GG13. Taxation reclaims some of the money it has issued.

Wrong formatting, that should read 'the government issued

It might issue it but we had to work to get it.

I don't understand what you don't understand. If people aren't heirs to small fortunes, they can do exactly as you suggest (we're in agreement) and earn their own money.

It's the "better to start with" I have an issue with. Nobody should start off better.

Allira

It might issue it but we had to work to get it.

And you think it's fine that some people don't have to work to get it?

It's not as though the govt. is asking for all of it back. Your heirs get to keep at least 60% of the money they haven't earned.

growstuff

I don't understand what you don't understand. If people aren't heirs to small fortunes, they can do exactly as you suggest (we're in agreement) and earn their own money.

It's the "better to start with" I have an issue with. Nobody should start off better.

But they do, and pretend they don't.

Allira

It might issue it but we had to work to get it.

Not necessarily. Some people don't work to get their hands on money.

My former mother-in-law is one of them. She had her first child when she was 19 and never worked outside the home after that. Her first husband died quite young, but their house had an insurance policy, so the mortgage was paid off. She was a money grabber and found herself a rich second husband and inherited his assets when he died. She's had the benefit of a high income for most of her life without working for it.

My former husband will inherit what remains (after paying IHT!), despite not having worked himself for the last 25 years. I see absolutely no reason why future generations should benefit. Funnily enough, my children (who might be in line to benefit one day) agree with me. They're perfectly capable of earning their own money.

eggplant

growstuff

I don't understand what you don't understand. If people aren't heirs to small fortunes, they can do exactly as you suggest (we're in agreement) and earn their own money.

It's the "better to start with" I have an issue with. Nobody should start off better.

But they do, and pretend they don't.

I know. That's the point I've been making all along.

Norah

GrannyGravy13

I never thought the UK would become a country where bettering oneself and accruing savings are viewed as a revenue stream for the Government on your death as opposed to ensuring your heirs will not become dependent on the state…

What is the point!

This is logic - seems not highly valued.

Really? We have had IHT in the UK since 1894 It's not a new thing that people never thought would be something that could happen here.

I agree (as I've said) that helping our children is something that most parents want to do, and IMO there is nothing wrong with that. Unfortunately, after 14 years of seeing inequality rise and the gap between rich and poor widen we are increasingly seeing the only way young people can buy a house (for instance) is if they have financial help from parents. More and more basic things now cost money - as well as housing there is dentistry, timely medical care, even education in some areas where there are no well-performing schools. Those who inherit large sums can afford all of that (and that's before you start on luxuries), whereas those who genuinely make their own way via their own work will struggle. Inheritance tax doesn't go a long way towards equalising things, but it makes some inroads.

There is also the fact that the rich don't spend anything like as much of their income as the poor, and money in the bank is not being productive for anyone other than the owner. It is the poor who have 100% of their income taxed one way or the other - whether by income tax at source, or because they have no choice but to spend all of it on necessities. Again, inheritance tax goes some way to ameliorate this discrepancy. Not much, as only 4% of the population pay it, but some way is better than nothing.

Maizie D we are allowed to be hysterical at the thought of the LP Government getting their hands on what should be going to our children! They will waste it up the wall!