IHT- how to avoid if you have enough wealth

ronib

The IFS claims that the Home Office overspent on its budget for asylum support over 3 years by 8 billion pounds.
(Guido Fawkes).
I don’t quite get this one. Was the budget right to start with? Do you just move money around from one project to another?

The report is extremely clear, and this article explains the issue and its consequences

ifs.org.uk/articles/home-office-budgeting-and-asylum-overspends

Siope strange way to run a budget in my opinion. Clearly room for improvement. Interesting to see how Labour tackles this issue. Presumably they will?

Doodledog

No, not the politics of envy - the politics of fairness.

Many others have worked equally hard, done without luxuries such as holidays, cars and latest electronic gadgets, but don't live in the SE, where (as others have agreed) much of the money passed down to the next generation comes from unearned income in house price inflation.

Children who inherit that unearned wealth simply compound the geographical unfairness and will pass it to the next generations in perpetuity. It's not about envy - it's about justice. It is easy to get trapped in an area where house prices are low, as geographical mobility and therefore opportunities for work are limited. The utterly tone-deaf advice that people should 'get on their bikes' is idiotic when many years of paying into a mortgage in one area wouldn't buy a shed in another. There is also the unfairness of having people retiring to cheaper areas having inherited money or having sold a small house whether as BTL or to live mortgage-free, which pushes up prices for locals. I've heard it called FILTH - Failed In London, Try Hastings. I wouldn't use that sort of language personally, but I understand the resentment.

Why do people think there are so many disaffected people in the UK? On one hand there are those with unearned wealth of hundreds of thousands, those who have had the opportunity to earn hundreds of thousands, those with large pensions and maxed out ISAs and full holdings in Premium Bonds, and on the other there are those who use food banks, have to declare birthday presents to have them deducted from Universal Credit, have to work for minimum wage and hand much of it over to landlords and scrape by on what's left. The second group suffers from worse health and lower life-expectancy than the first, too, and when they die there is much less to pass down to their children. If care is needed, a £100k cap will eat up most of the value of a £120k house, but just scrape a bit off the top of the value of one worth £1m.

This is not about working hard - it's about life chances.

We have seen how easy it is for social cohesion to break down. If we want to live in a country that is ruled by consent and have streets that are safe to walk on we have to do something about the unfairness, and IHT is one way to stop it being so ingrained. Those who have had the good fortune to accumulate wealth (via savings, hard work or inheritance) can still pass some of it on - it is a basic human instinct to want to help the next generation - but after a point at least some of it should go back to the public purse.

I do not live in the SE I'm a northener presently living in the Midlands and as to another of your points , I believe we all make our own opportunities.
Imo the labour party is more about taking from one section of the population rather than trying to help another section to improve their situation.

Sorry - I'm not sure what where you live has to do with any of my points. They are not about you, or me, or anyone in particular.

Yes, we make opportunities, but it is much easier for someone to 'make an opportunity' when they have parental money behind them than if they are helping to support their parents out of a low salary.

Of course you are entitled to your opinion, but in mine the government is trying to produce a level playing field to give everyone the same chances. Not everyone will take advantage of the chances they get, of course, but taking a bit more from the 4% of the population who pay IHT on money they have not earned is not too big a price to pay for giving more chances to more people.

Doodledog. I believe there’s very little chance that social inequality will be remedied by this Labour government. Or any government come to think of it. So tax away - won’t make any difference.

the government is trying to produce a level playing field
By taking away WFA from pensioners whilst leaving MPs with heating allowances, expenses, and subsidised meals.
While those in Westminster can take advantage of publicly funded meal discounts, the campaign pointed out that three million Brits relied on food banks last year alone.
How is that a level playing field ?
How has it been level under any government?

Witzend

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!

Can you change the access age to 21? At 18 very likely to be blown on having a good time 😊
My aunty left my 3 3k each at 18.....it was gone on the blink of an eye 🙄

My DC were left a small sum by my father (hundreds, not thousands). Invested at that time nearly doubled it.

They all spent it on travelling. They do say travel broadens the mind but they had a good time as well..

Doodledog thank you for taking the time to write the things I would have written if I hadn't been so weary with this "conversation".

Thank you.

ronib

*Doodledog*. I believe there’s very little chance that social inequality will be remedied by this Labour government. Or any government come to think of it. So tax away - won’t make any difference.

Tax alone won’t, no. We need more fundamental reforms too. I very much hope that we’ll get them, but if the horror at having a tiny bit of privilege redirected to others is anything to go by, I have my doubts. There is no point in being radical if the government will be voted out after one term, and my worry is that they won’t be allowed the chance to see a fairness agenda through. Time will tell though.

Doodledog don’t know quite how to say it but social inequality has been around from almost the beginning of mankind. So far it has escaped any real intervention and I think, without any malice, that a fairer society is much harder to achieve and is beyond the reach of any government at the moment. I hope for better but ….

I know, and unfortunately I agree. I'm not totally naive. I just think that we need to try. And that every little helps.

Doodledog

I know, and unfortunately I agree. I'm not totally naive. I just think that we need to try. And that every little helps.

I agree. I also think that a PM leading the way, setting an example by putting his own government house in order would make people less cynical about the things they do.

Even a simple step like e.g. by removing the subsidised meals for MPs would show willing.
It’s never happened before and it’s not going to happen now.

Doodledog

Sorry - I'm not sure what where you live has to do with any of my points. They are not about you, or me, or anyone in particular.

Yes, we make opportunities, but it is much easier for someone to 'make an opportunity' when they have parental money behind them than if they are helping to support their parents out of a low salary.

Of course you are entitled to your opinion, but in mine the government is trying to produce a level playing field to give everyone the same chances. Not everyone will take advantage of the chances they get, of course, but taking a bit more from the 4% of the population who pay IHT on money they have not earned is not too big a price to pay for giving more chances to more people.

You were the one talking about people who live in the SE - hence my point.
People who 'make opportunities' do not always have parental money behind them. It could just as well be money they have earned themselves throughout their life in which case they have already paid tax on it.
So, the people who sit back and choose not to 'take advantage of the chances they get' should be bailed out by everybody else?

Maddyone - not meaning to rain on your parade but the Galapagos Islands are now suffering from over tourism.

I think that some of you are forgetting what are taxes are spent on!

Schools
Roads
Supporting culture
Libraries

I suppose that some of you will object to money going to art galleries, theatres, ballet, opera and music. These things are essential to our well being. Think of the outcry when a Tory MP ordered some murals in a refugee childrens' centre to be painted over. Robert Jenrick I think.

You were the one talking about people who live in the SE - hence my point.
I was saying that in areas such as the SE house prices have risen far more than in other areas. As a result, when that unearned income is passed on to younger generations, the inequality between geographical areas is perpetuated, and genuine mobility is lost. People, however capable, are unable to move into more expensive areas, so the pool of applicants for jobs is smaller, and the country as a whole loses out, as well as the people who get stuck in cheaper areas.

People who 'make opportunities' do not always have parental money behind them. It could just as well be money they have earned themselves throughout their life in which case they have already paid tax on it.
If someone has made money throughout their life, by definition they are older, so are unlikely to 'make opportunities' with it. They are more likely to retire, then pass on the money to their children. Of course it is easier to make opportunities when there is financial support, and if you live somewhere where there is investment. If you can afford to live there thanks to help from family money then it's easier again.

So, the people who sit back and choose not to 'take advantage of the chances they get' should be bailed out by everybody else?
You mean they shouldn't get unearned money? Well, that's kind of where we came in, isn't it?

Perhaps a rise in the threshold. I'd imagine there would be far less complaining about IHT with a threshold of £5,000,000.

Perhaps IHT on the Queen's estate and those of her heirs - everyone putting money toward the goal of a better society?

Doodledog If someone has made money throughout their life, by definition they are older, so are unlikely to 'make opportunities' with it.

I believe 'making opportunities' was in reference to people making their own opportunities without family money - financial support.

No family money for us. We made our way alone with family financially supporting our children attending Catholic School.

People can make their own way.

Norah

Doodledog If someone has made money throughout their life, by definition they are older, so are unlikely to 'make opportunities' with it.

I believe 'making opportunities' was in reference to people making their own opportunities without family money - financial support.

No family money for us. We made our way alone with family financially supporting our children attending Catholic School.

People can make their own way.

Well said !

They can. We haven't had any family money either. But it is much easier if people do get it.

If it weren't, why do people feel so strongly about IHT?

Doodledog

They can. We haven't had any family money either. But it is much easier if people do get it.

If it weren't, why do people feel so strongly about IHT?

Full circle.

Taxes have already been paid on our saved money.

Raise income taxes - faster, nobody has to die first, easy, fair.

There is a difference between 'family money' and inheritance.

Generally speaking, 'family money' is money available to help buy a house, start a business, or otherwise advance a career and comes to one during ones economically active years.

Inheritance is what you get when someone dies and for most people, especially, nowadays with increased longevity, is money you inherit very late in your career or in retirement. It enables one's retirement to be less restricted and pays for private health treatment and care costs.

Since the clear intention of the new government is to promote Muslims in society and disadvantage those of us who have worked and made fiscal contributions all our lives

Perhaps some people are both Muslims and have made fiscal contributions?

Perhaps some people have endured a catalogue of bad luck and poor health and a difficult start and can't go on a cruise and worry about IHT.

M0nica

There is a difference between 'family money' and inheritance.

Generally speaking, 'family money' is money available to help buy a house, start a business, or otherwise advance a career and comes to one during ones economically active years.

Inheritance is what you get when someone dies and for most people, especially, nowadays with increased longevity, is money you inherit very late in your career or in retirement. It enables one's retirement to be less restricted and pays for private health treatment and care costs.

Thank you for your explanation.

We've received neither, I considered the expressions equal.

We're quite pleased with ourselves in the no family money/inheritance regard. We've no problem giving money now for that which we view as important (Catholic school, any lessons, University, private health).

No effect on retirement.

However, I suppose he'd have to retire for us to know.