IHT -Tories help their own?

stator

This idea of passing on your house to your children is bizzare and without any justification. By the time most people die their children will be 60+ and thinking about retiring themselves. Most people don't even live near their relatives. I'm willing to bet that the vast majority of houses that are inherited are immediately sold. I guess it's hardly surprising that the Tories are introducing another way for rich people to dodge taxes.

westernpromise

Houses in the south east have to be sold to pay all the IHT.

I'd quite like to live out my life in the house I grew up in, but the state wants and feels entitled to the money, so it won't happen.

purch

IHT is a ridiculous tax, that can be planned for and avoided in many cases.

Just giving an exemption for housing is bizarre in the extreme.

getmore4less

Only 3% of estates pay IHT and in many cases it could have been avoided with some planning.

redux

stator wrote: »

This idea of passing on your house to your children is bizzare and without any justification.

It's been happening for hundreds of years.

Originally the idea of inheritance tax was it only paid by the richest people.

Nowadays the richest families are able to avoid inheritance tax much more easily than people who inadvertently let their house value take them into the bottom end of it, so any statement that only the richest 2 or 3% pay it is pretty inaccurate.

westernpromise

3% of estates pay it but many more are exposed to it.

You can't avoid IHT where the majority of the estate is the house unless you're prepared to sell the house before you die. Thus means it captures people whose estates' main asset is a house that's gone up in value, but not the really huge estates where various Labour grandee fiddles are possible.

Incidentally, IHT is of course just a tax on house price inflation. What does the panel think will happen to house price inflation if the state has a vested interest in house prices going up?

redux

westernpromise wrote: »

Houses in the south east have to be sold to pay all the IHT.

I'd quite like to live out my life in the house I grew up in, but the state wants and feels entitled to the money, so it won't happen.

Not necessarily.

Only the amount over the tax free threshold is taxed.

Then I believe an arrangement may be made to pay the tax spread over 10 years, with current interest rate about 3%.

Or you might take out a mortgage if that has a slightly better repayments.

getmore4less

redux wrote: »

It's been happening for hundreds of years.

Originally the idea of inheritance tax was it only paid by the richest people.

Nowadays the richest families are able to avoid inheritance tax much more easily than people who inadvertently let their house value take them into the bottom end of it, so any statement that only the richest 2 or 3% pay it is pretty inaccurate.

3% of estates is not the same as richest.

I have not checked the stats but isuspect a significant number have no kids.
(might do the checks if I get time)

getmore4less

westernpromise wrote: »

3% of estates pay it but many more are exposed to it.

You can't avoid IHT where the majority of the estate is the house unless you're prepared to sell the house before you die. Thus means it captures people whose estates' main asset is a house that's gone up in value, but not the really huge estates where various Labour grandee fiddles are possible.

Incidentally, IHT is of course just a tax on house price inflation. What does the panel think will happen to house price inflation if the state has a vested interest in house prices going up?

There are ways to reduce IHT without selling, life interest nil rate band will trust protect 325k against future gains and are not subject to cgt as PPR applies.

chewmylegoff

redux wrote: »

Accepting that line of reasoning wouldn't be so logical.

Labour governments aren't averse to increasing the inheritance tax threshold, having done the last 12 increases.

That rather ignores the fact that their current intention is to impose a "mansion tax" which will fall almost entirely on London residents. I doubt a floating voter will be thinking back to when the Blair govt increased the IHT threshold by RPI.