IHT -Tories help their own?

CLAPTON

redux wrote: »

I think that's correct, though as I edited and added to my post above, I'm not quite sure if that is fully automatic nowadays or still depends on the wills being written in a certain way.

But that's the basis of the assumed numbers being mentioned, £325k per person and Osborne wants to add £175k each, thus £1 million overall.

I think some long-term couples might be getting married when they look at this.

Effectively that arrangement means that whereas beforehand each parent might leave everything down to the kids, doing it this way means it can intermediately go to the surviving spouse without tax penalty later.

But for families likely to have larger amounts to consider, there are ways to mitigate it in advance, involving potentially exempt transfers and trusts and so on.

potential exempt transfer (PET) simply means you give your money away at least 7 years before you die.

this is not always easy if it's tied up in a Property

The ability to transfer the unused proportion of a deceased spouse's IHT allowance, was brought in by the socialist Brown.

stator

chewmylegoff wrote: »

Yes that's right if you're married or in a civil partnership - effectively the nil rate band is already £750k in such circumstances.

Personally I would just scrap IHT altogether and introduce a gift tax of 100% chargeable on any gift (including a fiver slipped into a card by nana - even the cost of the card would attract a tax charge if I had anything to do with it).

I partly agree. You could potentially scrap a lot of taxes and replace them all with an "Unearned income tax". Whenever you receive money that wasn't in exchange for your hours worked you would be taxed at a fixed rate of 50%.

chewmylegoff

BobQ wrote: »

Interesting comments on IHT, but my OP was about the impact on the housing market.



Surely there are wider implications of this change that will impact on housing availability and prices. I think it is very contemptuous of hard working people aspiring to buy a house in areas of already high house prices. Will it not drive up house prices at the lower levels? It seems quite divisive between those who own and those who rent.

Why would it drive up prices at lower levels when there is already a nil rate band of £375,000 which can be doubled up much of the time?

I think it will have no perceptible impact on the housing market - much as it had no impact last time they announced it for the 2010 election cos if they get into govt it will be as part of a coalition and this is unlikely to make it into a coalition agreement...

System

purch wrote: »

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

I think the proposal is to increase the threshhold limit on an estate's total value, not specifically the house?
It would be bizarre to try and apply it specifically to houses, which are often in shared ownership.

chewmylegoff

Graham_Devon wrote: »

Maybe. But the tories keep making a big statement that we are all in it together.

So sure, if they want to target their core voter with tax cuts, that's fine.

But suggesting at the same time that were all in it together?

You can't have it both ways and not expect criticism.

True - I suppose in much the same way Labour cannot expect to be laughed at when they claim the economy would be in safe hands if they were elected or when they bang on about the government borrowing more than originally planned and the Lib Dems will be mistrusted by everyone whatever they say.

None of the parties really have any credibility and anyone with half a brain can work out they are just saying, regardless of their own beliefs, whatever they think will get them into power so they can be in power.

Loughton_Monkey

Clifford_Pope wrote: »

I think the proposal is to increase the threshhold limit on an estate's total value, not specifically the house?
It would be bizarre to try and apply it specifically to houses, which are often in shared ownership.

It is specific to house....

If the Conservatives win the general election, then from April 2017 parents would each be offered a further £175,000 "family home allowance" to enable them to pass property on to children tax-free after their death.

This could be added to the existing £325,000 inheritance tax threshold, bringing the total transferable tax-free allowance from both parents in a married couple or civil partnership to £1m.

So if you die with £1 million including a £250K house, then the [joint] £350K home allowance would presumably only be partly used. The IHT would be based on £650K existing, plus £250K house, leaving £100K taxable.

.... yet another reason not to rent!

redux

CLAPTON wrote: »

The ability to transfer the unused proportion of a deceased spouse's IHT allowance, was brought in by the socialist Brown.

Thanks for filling in a memory gap.

So when I said the last 12 improvements to inheritance tax liability were under Labour, I was correct, but I could have stated 13.

There are some intuitive paradoxes about which tax policy belongs to which party.

I would support the Liberal Democrats' increases of income tax allowance, but I don't think they needed to be so rigid on inheritance tax. It's a bit odd their positions on these have been so strong in forming government policy.

Loughton_Monkey

Graham_Devon wrote: »

Maybe. But the tories keep making a big statement that we are all in it together.

So sure, if they want to target their core voter with tax cuts, that's fine.

But suggesting at the same time that were all in it together?

You can't have it both ways and not expect criticism.

Do you seriously believe the "straplines" of all political parties? If you do, then you're even dafter than I thought.

Your party is offering "A better future". So anything a lot of us might consider 'worse' means he has failed?

With Conservatives, we are all in the boat together. Fact. But why does that prevent us eating all the babies, and keeping all the food away from the weak?

Besides, the higher IHT threshold would literally apply to "all of us". The fact that some people are too poor to benefit has nothing whatsoever to do with it.

princeofpounds

With Conservatives, we are all in the boat together. Fact. But why does that prevent us eating all the babies, and keeping all the food away from the weak

Surely you mean keeping the food away from the rats and weevils in the bilge of the boat? ;-)

Loughton_Monkey

princeofpounds wrote: »

Surely you mean keeping the food away from the rats and weevils in the bilge of the boat? ;-)

What do you mean?

The SNP, Greens, and UKIP would not be allowed in the boat in the first place!