Inheritance Tax changes

spenderdave

Surprised this has not been mentioned here yet, and not sure whether this is the right place to post it.

Today's media is full of stories of the Inheritance Tax threshold to be increased in the budget to the headline figure of £1million - sounds great till you read the small print.

For those of us who are single, already close to the existing limit on savings alone and have a house that for no reason of our own is already worth more than the £175k new main residence allowance it is effectively no change. And if I read it correctly that £175k only applies if you pass the house on to children/grandchildren, not if you sell it on the open market.

Hopefully it will be some 20 years or so before my dependants need to sort out my affairs but when it happens I would rather them not have to go through all the hassle of sorting out inheritance tax as well as selling a house that is no use to them as none of them live anywhere near here.

When we see the small print it may well be that it is not the election winning pledge they made it out to be...

zygurat789

spenderdave wrote: »

Surprised this has not been mentioned here yet, and not sure whether this is the right place to post it.

Today's media is full of stories of the Inheritance Tax threshold to be increased in the budget to the headline figure of £1million - sounds great till you read the small print.

For those of us who are single, already close to the existing limit on savings alone and have a house that for no reason of our own is already worth more than the £175k new main residence allowance it is effectively no change. And if I read it correctly that £175k only applies if you pass the house on to children/grandchildren, not if you sell it on the open market.

Hopefully it will be some 20 years or so before my dependants need to sort out my affairs but when it happens I would rather them not have to go through all the hassle of sorting out inheritance tax as well as selling a house that is no use to them as none of them live anywhere near here.

When we see the small print it may well be that it is not the election winning pledge they made it out to be...

Or press speculation which may or may not be based on a leak.#
If you wait until after he sits down the there may be something to discuss.

SeniorSam

Whatever the new rules MAY be, it wont happen until 2017, so time to plan. It will be good to have an additional £175,000 allowance on top of the present £325,000 for each personal allowance but it has been a long time getting a more realistic increase. The first indication of this increase was in 2007, so it will have taken 10 years by then. So slow.

Sam

Keep_pedalling

What ever the proposal, let's hope common sense prevails and the bonkers idea to link it to property is ditched.

katejo

SeniorSam wrote: »

Whatever the new rules MAY be, it wont happen until 2017, so time to plan. It will be good to have an additional £175,000 allowance on top of the present £325,000 for each personal allowance but it has been a long time getting a more realistic increase. The first indication of this increase was in 2007, so it will have taken 10 years by then. So slow.

Sam

The article which I read seemed to assume that all homeowners with a property currently affected by inheritance tax were couples. Absolutely no reference to any benefit for single homeowners at all. My house has exceeded the 325 k figure in the past couple of years.

getmore4less

The detail will be critical,

we could end up with some very crazy situations if it is tied to property , couple status, beneficiary status ...

Keep_pedalling

getmore4less wrote: »

The detail will be critical,

we could end up with some very crazy situations if it is tied to property , couple status, beneficiary status ...

And if you sell up to move into rented sheltered accommodation or a care home, your estate suddenly becomes subject to a lot more tax. The idea that a house is more important than any other type of asset is nuts. The first thing most people do when inheriting a house is turn it into cash by selling it.

This move is supposed to reduce tax revenues by £1B. If the government are happy to do this then keep it simple just implement an increased allowance across the board. Property owners won't get so much but at least it will be fairer , far simpler to manage and won't add further pressure to the housing market.

zygurat789

Keep_pedalling wrote: »

This move is supposed to reduce tax revenues by £1B.

Just goes to show how pointless this thread is until Wednesday pm

getmore4less

The number of estates that pay IHT is really low.

Chances are any change will just create loopholes rather than simplify.

The no CGT on estates probably costs more in lost revenue than anything else.

spenderdave

It certainly is the case that we single people lose out. No wife or kids to spend our money on, mortgage long since paid off, so we have significant savings and a house (in my case bought in 1977 for £12k..) now worth well over £175k. Nobody to pass it on to under the normal inheritance avoidance schemes so we are stuck with it.
We will have to wait to see the detail after Wednesday (and I mean detail, what he says in the commons will be restricted to the headline £1m figure) but I am not hopeful for any real change. Just put it up to a real £1m and I (and whoever sorts out my affairs when the time comes) won't have to worry about it.

PasturesNew

spenderdave wrote: »

It certainly is the case that we single people lose out. No wife or kids to spend our money on, mortgage long since paid off, so we have significant savings and a house (in my case bought in 1977 for £12k..) now worth well over £175k. Nobody to pass it on to under the normal inheritance avoidance schemes so we are stuck with it.
We will have to wait to see the detail after Wednesday (and I mean detail, what he says in the commons will be restricted to the headline £1m figure) but I am not hopeful for any real change. Just put it up to a real £1m and I (and whoever sorts out my affairs when the time comes) won't have to worry about it.

Find a nice little retirement flat for about £100k and blow £75k on days out, the seaside, takeaway food and a new telly. You can't take it with you ...