guaranteed way to avoid inheritance tax

evenasus

home_alone wrote: »

I took 250K out of Icesave (wasnt I lucky) over the last 12 months and gave it to the kids and I plan to live another 30 years so there.

gary

Good for you Gary:T

Just make sure you live for the next seven years.
Then the tax man can't claim a penny.:D

beingjdc

evenasus wrote: »

Several years ago one of my sons sustained horrific injuries to his leg, the surgeon, after four operations in six days

Paid for by the grubby hands of the taxman, by any chance?

I'm sorry to hear of his injuries. I'm glad we have a political system which has been set up to hold employers to account - it's the same one that has been established to scale back the extent to which wealth is a matter of luck of birth, not hard work.

isofa wrote: »

If you think by passing money and wealth down to generations somehow makes a distinction between rich and poor

Yes. I think there is a distinction in inheritance between someone who inherits over £650,000, and someone who inherits £0. Don't you think that's a distinction? Why not?

Suppose one person inherits £1,000,000 when they are 21, and lives off £25,000 a year for the next 40 years, and another person inherits nothing, and works for a living, earning the same amount.

Do you think there's 'no distinction' between those people's lifestyles? If you agree that there's a distinction, what do you think causes that distinction if it isn't the richness or poorness of their deceased relatives?

EdInvestor

katybshopaholic wrote: »

However 50% of our cash went into the L&G Property Fund, which we were told at the meeting was low risk, yet even at that time it was moderate to high risk. 5% went into L&G Artemis European Growth Fund and 5% Invesco perpetual income fund, both moderate to high risk..

Just to clarify, you've listed 60% of the total, where was the other 40% invested?

isofa

beingjdc wrote: »

Yes. I think there is a distinction in inheritance between someone who inherits over £650,000, and someone who inherits £0. Don't you think that's a distinction? Why not?

Suppose one person inherits £1,000,000 when they are 21, and lives off £25,000 a year for the next 40 years, and another person inherits nothing, and works for a living, earning the same amount.

Do you think there's 'no distinction' between those people's lifestyles? If you agree that there's a distinction, what do you think causes that distinction if it isn't the richness or poorness of their deceased relatives?

I clicked thanks rather than reply

No not really, because just like you can cite an random example so can I! I'd have hoped in your example that the person inheriting such wealth would be more responsible and want to have a career, hopefully (but obviously not always) coming from a well educated background, but at least well brought up - which requires no money.

Your example just alludes to the fact that the person who doesn't inherit may be "hard done by" and has a "worse lifestyle", that's not the fault of the person who inherited, or the relatives that earned and saved money to bequeath to that person either. Nor is it indeed fact - the less well off person might have a much more fulfilled lifestyle with a large family, children, charity work, millions of variables and parameters, the wealthier person may or may not have these, and may indeed have a "poorer" lifestyle.

Life isn't just about money. If you think money always makes peoples' lifestyles better, or them more successful, look at the many miserable lottery winners, high flying execs that commit suicide etc.

I could take your example and cite the opposite:

Suppose one person inherits 50Kor even 100K when they are 21, from the loss of a parent (firstly stop and think how this persons life will be entirely affected by such a loss*), he/she uses this as a deposit as a house, and just has a standard paying job, 20K to 40K through their lifetime, working hard and pays all their taxes; as opposed to the person who inherits nothing, and earns 100K plus a year in either a dangerous or high flying job. Is the one who inherits better or worse off than the other. Neither it's not a real case in point. * Other than the money factor I can speak of this at first hand losing people close to me at a young age, and even if money was involved, no amount could possible counter the loss.

Anyway we are getting off topic, your argument is that it's a fair tax, mine is that it isn't a fair tax!

isofa

evenasus wrote: »

Good for you Gary:T

Just make sure you live for the next seven years.
Then the tax man can't claim a penny.:D

If you regularly give sums of money to your children, then this is classed outside the gift area, and can't be touched by the tax man, a good accountant can advise you here. And you can give £3000 (or has it gone up?) away a year without any implication anyway.

Say for example for many years you've given your children £5000 a year as a helper in life, through Uni or whatever, as long as you can show you've done this for a significant period, it there is outside the gift zone, and you can carry on giving in that way.

benood

EdInvestor wrote: »

This was an 8% fall. Certainly within cautious risk levels.Many people don't seem to understand the difference between no risk, low risk and cautious.

I don't understand how you calculate an 8% fall when the investments fell by 16% from £125k to £105k?

evenasus

beingjdc wrote: »

Paid for by the grubby hands of the taxman, by any chance?

And where did the tax man get the money?

Could the tax & national insurance my husband & I have both paid for the last 50 years have contributed?
Not to mention my son's own 20 odd years contributions.

EdInvestor

benood wrote: »

I don't understand how you calculate an 8% fall when the investments fell by 16% from £125k to £105k?

Oops, duly corrected:o. It doesn't really impact the issue hoever.

Tighthead

beingjdc wrote: »

Because it's not theirs any more, they'd be gone. The person being taxed is the person getting wealth they have not earned.

Secondly, most inheritances are overwhelmingly made up of property, which people haven't actually "worked hard to build up", but have overwhelmingly accumulated thanks to the work of inflation. I have said before I would be more than happy to exempt the purchase price of any property willed, or cash derived from its sale, from inheritance tax - but I imagine the £650k property you need to be leaving to qualify for inheritance tax was most commonly bought in the early 70s for around £75k.

This is completely missing the point. Yes they'd be gone, but they're also doing the IHT planning to protect their estate as much as possible from IHT. It's perfectly legitimate, so I don't see what the problem is. Do you have money into an ISA? Your selfishness in putting money into a tax-efficient savings/investment arrangement is depriving me of income tax.

The estate is being taxed, not the beneficiary. If I want to protect my estate from IHT, then I shall. That's not selfish, it's sensible.

The vast majority of people whose estate may exceed the NRB, may do so because of property price increases, but I bet they've stil worked damned hard to pay their mortgages off.

baby_boomer

Doubly ironic that a Labour government plans to increase each couple's allowance to £700K on the grounds of house price increases.