Budget 2010: The Chancellor has announced that the inheritance tax threshold will

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Former_MSE_Rose
Former_MSE_Rose Posts: 128 Forumite
edited 24 March 2010 at 2:37PM in Cutting tax
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  • John_Pierpoint
    John_Pierpoint Posts: 8,391 Forumite
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    It also means that those people with nil rate band trusts need to be careful that it does not out grow its description?
    Another stealth tax, this time on capital in addition to the 50% income tax?
  • jrguillebaud
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    Inheritance Tax Thresholds Frozen In The Budget For Four Years.
    The Big Nil Rate Band Swindle


    The inheritance tax thresholds have been frozen in the budget for four years. No doubt Mr Darling will point to the fact that he had previously brought in legislation to allow the transfer of nil-rate band between spouses, following the Conservatives' proposals to increase the inheritance-tax threshold to £1m, thereby effectively doubling the nil rate band from £325,000 to £650,000, for widows and widowers, when the second spouse dies.

    BUT Where are the first spouse, eg husband died before 1972 and left all his property to his wife, there was no exemption from estate duty for transfers between husband and wife as there was after this date and so all his nil rate band is used up and none is now left for transfer.

    This means that the generation who fought two world wars has been abandoned. Many suffered terrible mental and physical wounds and deprivation.

    This is grossly unfair.

    So much for Mr Darling's tribute to our armed forces in his budget speech. So much for Gordon Brown's promise that our armed forces efforts today will never be forgotten. He has already forgotten the war generation to whom he owes his freedom and very existence.

    No one in the armed services or of their families should believe for a second Gordon Brown's and Alastair Darling's promises that their efforts or sacrifices will never be forgotten.

    The response to a campaign by MPs and tax experts to the Treasury, who initially didn't even understand the problem hidden in the legislation, until it was explained to them, was that it was too difficult to correct. Tax experts agree that it would be simplicity itself. All that is necessary is a notional tax exemption for transfers between husband and wife before 1972 for the purposes of today's nil rate band transfers, just as there was after that date.

    This small correction would cost a negligible amount in the scheme of things, but would mean everything to the widows or widowers and their families who gave so much in the struggle to fight for our freedom.

    Roger Guillebaud.
    01647-24331
    jrguillebaud@gmail.com
  • John_Pierpoint
    John_Pierpoint Posts: 8,391 Forumite
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    edited 26 March 2010 at 4:47PM
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    Any one with experience of claiming that an old soldier eventually died, as a result of illness or injury acquired on active service ?

    If so send me a Personal Message (PM) please.
  • John_Pierpoint
    John_Pierpoint Posts: 8,391 Forumite
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    edited 26 March 2010 at 4:46PM
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    Inheritance Tax Thresholds Frozen In The Budget For Four Years.
    The Big Nil Rate Band Swindle


    Where the first spouse,( eg husband) died before 1972 and left all his property to his wife, there was no exemption from estate duty for transfers between husband and wife as there was after this date and so all his nil rate band is used up and none is now left for transfer.

    This means that the generation who fought two world wars has been abandoned. Many suffered terrible mental and physical wounds and deprivation.

    This is grossly unfair.

    No one in the armed services or of their families should believe for a second Gordon Brown's and Alastair Darling's promises that their efforts or sacrifices will never be forgotten.

    This small correction would cost a negligible amount in the scheme of things, but would mean everything to the widows or widowers and their families who gave so much in the struggle to fight for our freedom.

    Roger Guillebaud.
    01647-24331
    [EMAIL="jrguillebaud@gmail.com"]jrguillebaud@gmail.com[/EMAIL]

    Hi Roger.

    I'm wondering if it is even more "unfair" than you realise?
    Back in those days relatively "rich" estates paid something akin to stamp duty on rapidly increasing steps.(Thus creating "dead" zones where it was cheaper to give all the extra value to Capital Taxes Office rather than have the whole estate rate go up another 5% similar to trying to argue a house buyer up from 999K to 1,001K);)
    This estate duty was commonly known as "death duties" and had to be paid even if the spouse received everything.

    However there was a mechanism that allowed the assets to pass free of tax on the second death.
    Convoluted explanation starts here and links onwards.
    http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM04343.htm

    John
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