IHT- how to avoid if you have enough wealth

MOnica See PM's under headings
Wallingford.

GrannyGravy13

escaped enjoy your savings, they are yours to do with as you wish.

They are not and never should be a source of revenue for the Government of the UK!!

They will be a source of revenue for the government whenever they are spent.

M0nica

We cannot all pick and choose what we want taxation to be spent on. I doubt there is a person in the country who doesn't disapprove of some aspect of government spending.

But we are a society under th rule of law and we accept that if there are things money is being spent on that one person disaproves of, there are other people who disapprove of the expenditure the first person approves of, so it evens out.

Personally, I put the common good ahead of other considerations. if I am fortunate enought to pay IHT, then I am more than happy that, even after death I contribute to the maintenance of the safe and stable country that has enabled me to have such a successful life.

Well said MOnica, and also this:
As far as I am concerned, and there is likely to be IHT paid on my estate, IHT is my last thank you to the country who provided me with a politically stable regime to grow up in, (state) educated me, paid me to go to university, which enabled me to have a well paid professional career, and looked after my health without me worrying about the cost.

I'm in complete agreement with you.
I am surprised and shocked that some think that deliberately depriving the government of lawful taxes (spend, spend, spend) is an acceptable thing to do.
How are we to get public services running properly if the better off do this. I am not in any 'danger' of having enough to pay IHT; I truly admire and respect MOnica's attitude, and I would feel the same in her position.

Allira I still dislike the premise that it is not the deceased who pays IHT, it is their heirs because that t me is fairly illogical.

The money/estate belonged to a person who has presumably bought property and saved with money which has been taxed by the Governmet. Is is right or moral for that Government to decide that they are entitled to take nearly half of someone's savings (over a certain amount) because they have died?

Indeed. No logic involved.

I am not in any ‘danger’ of having enough to pay IHT

Precisely, which is why it’s so easy to think that others should feel the same.

To put the figures into perspective, I think currently less than 4% of the population pay IHT, though this figure is likely to rise with the more expensive properties, especially in the South East.
However, over 60% of the population are actually against IHT and say it is unfair. It is just a money grabbing exercise.

I think it is acceptable, and of course completely lawful, for people to chose to do what they want finally with their savings etc. I am neither shocked, nor surprised, that people like M0nica might be happy to leave a portion of her estate, which will incur IHT, to the government. I also understand that there are those who would prefer not to, that's entirely their perogative too.
But to say that these people are deliberately depriving the government of lawful taxes, doesn't stack up. IHT actually raises very little in proportion to other taxes.
Also, I see no moral justification in taxing an individual on their death, as this just represents double taxation. If you have already paid taxes when you earned your money, you are then being effectively forced to do so again. (Or triple taxation in my case if I count the IHT I already paid on the same estate 40+ years ago).

If the current government is so desperate for my pittance, and that of others here, that they wish to raise the IHT to shore up the economy, then they are obviously running a pretty poor show. But I would say that, of course.

choughdancer

M0nica

We cannot all pick and choose what we want taxation to be spent on. I doubt there is a person in the country who doesn't disapprove of some aspect of government spending.

But we are a society under th rule of law and we accept that if there are things money is being spent on that one person disaproves of, there are other people who disapprove of the expenditure the first person approves of, so it evens out.

Personally, I put the common good ahead of other considerations. if I am fortunate enought to pay IHT, then I am more than happy that, even after death I contribute to the maintenance of the safe and stable country that has enabled me to have such a successful life.

Well said MOnica, and also this:
As far as I am concerned, and there is likely to be IHT paid on my estate, IHT is my last thank you to the country who provided me with a politically stable regime to grow up in, (state) educated me, paid me to go to university, which enabled me to have a well paid professional career, and looked after my health without me worrying about the cost.

I'm in complete agreement with you.
I am surprised and shocked that some think that deliberately depriving the government of lawful taxes (spend, spend, spend) is an acceptable thing to do.
How are we to get public services running properly if the better off do this. I am not in any 'danger' of having enough to pay IHT; I truly admire and respect MOnica's attitude, and I would feel the same in her position.

spend, spend, spend as long as it is the persons money, it is legal and does not interfere with anyone else, so what?

As MaizieD has pointed out spending will create revenue for the Government via indirect taxes, just not at the punitive rate of 40%

I understand your point, but who would you prefer to be taxed to pay for health, education and so on? Someone with no inheritance behind them who goes to work every day and loses 20, 40 or 45% of their earnings (over a small allowance) to tax, and more to NI, or someone who may or may not be doing likewise but also has a chunk of unearned income land in their lap?

It's not as though IHT is charged on the whole estate, or even anything over £12500 - up to a million pounds can be passed on untouched. If you see an estate that has already attracted IHT and is still worth over £1m as a 'pittance' then that probably does explain your attitude.

up to a million pounds can be passed on untouched

At the moment, yes.

I suspect many are worried how Labour might alter the thresholds though, hence all the debate about IHT.

Yes, I understand that. What would people see as a reasonable amount then?

If the current government is so desperate for my pittance, and that of others here, that they wish to raise the IHT to shore up the economy, then they are obviously running a pretty poor show. But I would say that, of course.

The government raises £6 billion a year from IHT, and while some of it is from large estates, most of it comes from the cumulative total of your 'pittance' Doodledog

I would like IHT to be on a sliding basis, starting at 10% and at an estate valued at as little as £100,000. It would then be a much fairer tax.

paddyann54

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

Excellent point!

‘Pittance’ wasn’t my word M0nica. It was a direct quote, hence the quotation marks.

Rekarie

paddyann54
^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^

Excellent point!

Ours cost us over 3x the purchase price, especially when you think of the soaring interest rate and the removal of MIRAS.

@ Doodledog
I suppose the "pittance" comment was for me probably relative, compared with what I have already paid in various taxes throughout my life.
It will certainly also be far less than what I have paid 15 years each x 3 children in school fees, plus, until last year, a lifetime of private health care. How much has that saved various governments?
No-one can help it if a property in Mayfair drops into their lap. The important thing is to act responsibly with that chunk of unearned income and if possible, to preserve its value.
Maybe one fairer solution would be to allow the inheritance of the deceased’s home up to the average property price in indidvidual postcodes, but taxed as income beyond that? A bit of a minefield though.

Yes, it’s all relative. These things always are. On a board where people are complaining bitterly about losing £200 towards their fuel costs, describing assets of over £1m seems tone-deaf at best though.

Doodledog

Yes, it’s all relative. These things always are. On a board where people are complaining bitterly about losing £200 towards their fuel costs, describing assets of over £1m seems tone-deaf at best though.

Not tone deaf Doodledog just voicing their opinions on what is to some a punitive tax.

I totally disagree with this Government’s decision to remove the winter fuel allowance from pensioners at the level they have set.

Setting it at £15,000 would have been a much fairer outcome, as the median annual salary in the U.K. was £34,963 in 2023.

(Annual earnings varied significantly from North £31,200 to London £44,370)

I'm amazed that some think older people should not spend (spend, spend) their own lawfully earned money because they might deprive the Government of tax!

Surely those with sufficient savings to reach the IHT threshold have paid and may well continue to pay taxes in the form of income tax, VAT on purchases, vehicle licensing, Council tax etc and therefore still contribute to public funds and services?

Spending helps to stimulate the economy and keeps people in work.

Doodledog

Yes, it’s all relative. These things always are. On a board where people are complaining bitterly about losing £200 towards their fuel costs, describing assets of over £1m seems tone-deaf at best though.

I fall into neither category, will lose my WFA (just) and do not have assets of over £1 million but I can still feel very strongly about both issues and can decide what is fair and unfair.

Doodledog

Yes, I understand that. What would people see as a reasonable amount then?

I think it’s fine as it is now.

i do not think anyone has suggested that we shouldn't spend our money before we die.

But how we acquired our assets and how much they cost, high interests rates etc is irrelevant. IHT is paid on the value of someone's estate when they die. - and thats it.

Doodledog

Yes, I understand that. What would people see as a reasonable amount then?

£2,000,000 threshold maybe as £5,000,000

Norah

Doodledog

Yes, I understand that. What would people see as a reasonable amount then?

£2,000,000 threshold maybe as £5,000,000

-- maybe as much as --

Edit, I need an edit function, please.

Not tone deaf Doodledog just voicing their opinions on what is to some a punitive tax.
That's not the tone deaf bit. Calling over a million pounds a pittance is, IMO one deaf when there are so many threads with people worrying about their bills and how they will heat their homes.

Of course there is a huge variation in both income and capital amongst posters on a board like this one, and what represents a fortune to some will be a pittance to others, but it is perfectly possible to express opinions about financial matters without being crass.

Doodledog

*Not tone deaf Doodledog just voicing their opinions on what is to some a punitive tax.*
That's not the tone deaf bit. Calling over a million pounds a pittance is, IMO one deaf when there are so many threads with people worrying about their bills and how they will heat their homes.

Of course there is a huge variation in both income and capital amongst posters on a board like this one, and what represents a fortune to some will be a pittance to others, but it is perfectly possible to express opinions about financial matters without being crass.

Doodledog Of course there is a huge variation in both income and capital amongst posters on a board like this one, and what represents a fortune to some will be a pittance to others, but it is perfectly possible to express opinions about financial matters without being crass. Indeed.

Apart from the divisiveness of talking about IHT in the same time and space as removing WFP or perhaps free prescriptions and bus passes -- these are much needed on low income and not a pittance.