MSE news: Homes worth up to £1m could escape inheritance tax

Former_MSE_Paloma

Parents may be able to leave homes worth up to £1 million to their children without paying inheritance tax ...

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Homes worth up to £1m could escape inheritance tax




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Purplesky_2

MODEST homes?

Good grief.

Why on earth is wealth from primary homes so exempt from taxes?

Pincher

Haven't they heard of Principal Private Residence?


You don't pay capital gains on the house you live in, because it's generally accepted that you should have somewhere to live.


All they have to do is make your PPR exempt from inheritance tax, up to a threshold, say £1million, adjusted as necessary.


If the parents are divorced, I suppose they can pass on one each.

SeniorSam

I cannot see where the CGT, mentioned by Pincher comes into this, but perhaps I have missed something.

However, the £1m tax exemption for married couples has been talked about many times over the last few years, but the increase in the actual allowance has been exceedingy slow to improve.

If you are lucky enougn to have a property worth £650,000 now, if it were to increase in value by a little over 8% per year for the next 5 years, when this increase may come about, or not, you would have already reached your £1m level.

Will there be any 'special conditions' applicable to this 'extra' allowance, if not, if would have been easier to increase the existing nil rate band allowance for each person, so perhaps there may be a few 'strings' attached.

There are already many planning strategies that are perfectly legal to help reduce the burden of inheritance taxation provided action is take early enough. It is a tax that does not have to be paid.

Those seeking good professional advice may reep the benefits for their family. Those who don't, can only rely on the occassional increase that a selected governmet allows, but I for one would hope that an increase does come about.

Sam

Keep_pedalling

Why this obsession on property. If someone works hard save lots of money but choses to rent rather than buy, their children get taxed more than children whose parents paid peanuts for a house that has subsequently shot up in value without the owners have do do any work to earn that gain.

Once again the overprivalaged BB generation get given more stuff, for their votes.

And before anyone thinks this is sour grapes, I am one of those boomers who has a house worth 10 times the amount of capital I invested in it, so my kids would benefit big time if this came to pass.

Purplesky_2

SeniorSam wrote: »

I cannot see where the CGT, mentioned by Pincher comes into this, but perhaps I have missed something.

However, the £1m tax exemption for married couples has been talked about many times over the last few years, but the increase in the actual allowance has been exceedingy slow to improve.

If you are lucky enougn to have a property worth £650,000 now, if it were to increase in value by a little over 8% per year for the next 5 years, when this increase may come about, or not, you would have already reached your £1m level.

Will there be any 'special conditions' applicable to this 'extra' allowance, if not, if would have been easier to increase the existing nil rate band allowance for each person, so perhaps there may be a few 'strings' attached.

There are already many planning strategies that are perfectly legal to help reduce the burden of inheritance taxation provided action is take early enough. It is a tax that does not have to be paid.

Those seeking good professional advice may reep the benefits for their family. Those who don't, can only rely on the occassional increase that a selected governmet allows, but I for one would hope that an increase does come about.

Sam

Thank you for saying what I wanted to say in a more articulate and coherent manner.

SeniorSam

Keep_pedalling wrote: »

Why this obsession on property. If someone works hard save lots of money but choses to rent rather than buy, their children get taxed more than children whose parents paid peanuts for a house that has subsequently shot up in value without the owners have do do any work to earn that gain.

Once again the overprivalaged BB generation get given more stuff, for their votes.

And before anyone thinks this is sour grapes, I am one of those boomers who has a house worth 10 times the amount of capital I invested in it, so my kids would benefit big time if this came to pass.

The property is rather irrelevant when the allowance is for ALL assets of the one who dies, not just their home. Quite obviously bricks and mortar are by far the best investment anyone can make, unless they are an absolute 'wizz' on the stockmarket and prepared to pay tax as that grows.

The choice is theirs, but you and I know which is the best route to follow, dont we.

Sam

Pincher

SeniorSam wrote: »

I cannot see where the CGT, mentioned by Pincher comes into this, but perhaps I have missed something.

I am saying there is a well known precedent in treating your main residence as exempt from capital gains tax, because you need a house to live in. So it's a simple solution to exempt it from inheritance tax as well.


If you exempt the main residence from inheritance tax without a limit, rich people will simply buy a £50million apartment/house from the Candy Brothers, live in it, and the bulk of the estate pass down tax free. So a limit is needed.