Inherticance Tax Help

Enterprise_1701C

kidmugsy wrote: »

Or by ensuring the appropriate tax is paid on it, thus ensuring that someone else's children enjoy spongeing off well-funded public services and a social safety net.

Many things are possible.

There is a very good chance that a lot of tax has already been paid on the money used to buy this property, so the appropriate tax has already been paid on it.

Linton

Enterprise_1701C wrote: »

There is a very good chance that a lot of tax has already been paid on the money used to buy this property, so the appropriate tax has already been paid on it.

That isnt how IHT works.

Enterprise_1701C

Linton wrote: »

That isnt how IHT works.

It is a tax on money that has already been taxed several times over.

If our house were to be liable to IHT, we paid a lot of tax on the money we earned to pay for the house, along with stamp duty, all the money we have spent running the tax, including council tax, TV licence, all that sort of thing.

So it may not be how IHT works, but it does not change the fact that tax has already been paid on the money that they are taxing.

le_loup

Stop being silly. CGT is on the payable on the gain in the value of an asset, hence it's name. It's OK to be ignorant about a particular tax, but if you are, don't write about it.

uknick

Enterprise, how much tax has a beneficiary already paid on the estate before they inherit?

Keep_pedalling

Enterprise_1701C wrote: »

It is a tax on money that has already been taxed several times over.

If our house were to be liable to IHT, we paid a lot of tax on the money we earned to pay for the house, along with stamp duty, all the money we have spent running the tax, including council tax, TV licence, all that sort of thing.

So it may not be how IHT works, but it does not change the fact that tax has already been paid on the money that they are taxing.

I am sitting on over £500k of gain on my house purely on house price inflation, I have not had to work for that and neither have I paid any tax on it. Most people who whine on about the unfareness of IHT are in the same boat. Our estate is well into IHT territory, but it would not be so without the house and a couple of inheritances, so I am comfortable with that.

Enterprise_1701C

The beneficiary has not paid tax on the estate, but the person that bought it has.

What annoys me is the length of time we have spent paying for this house, yes it has gone up in value, but we did not just pay the price we offered for it, all the interest mounts up and a lot of our income was used to pay for it and a lot of sacrifices made to get there. A lot of tax was paid on that income too so yes, tax has already been paid on the money used to pay for it.

When IHT was first brought in it was a tax on the super-wealthy, these days it is a tax on the middle classes, and if Khorbyn had got in it would be a tax on anyone that wanted to own their own home because, horror of horror, there is still aspirational people in this country.

My daughter and her fianc! have just bought a house in Yorkshire, they bought one a similar size to ours at less than a third of the price.

My opinion is that it should go back to being a tax on the super-wealthy, these days that is people with houses in the £2 million plus range in the south, and in the north it should be people with houses in the £1 million plus range. And yes, I do think it should differentiate because prices are very different in the different regions, and it is my belief that it is unfair that people in the North of this island can leave a big house to their kids with little or no penalty.

le_loup

Enterprise_1701C wrote: »

and it is my belief that it is unfair that people in the North of this island can leave a big house to their kids with little or no penalty.

Worth half the value.
I don't think you've thought this through.
As for your silly political comment - do you know how inheritance tax works in "The Land of the Free"?

uknick

Enterprise_1701C wrote: »

The beneficiary has not paid tax on the estate, but the person that bought it has.

What annoys me is the length of time we have spent paying for this house, yes it has gone up in value, but we did not just pay the price we offered for it, all the interest mounts up and a lot of our income was used to pay for it and a lot of sacrifices made to get there. A lot of tax was paid on that income too so yes, tax has already been paid on the money used to pay for it.

When IHT was first brought in it was a tax on the super-wealthy, these days it is a tax on the middle classes, and if Khorbyn had got in it would be a tax on anyone that wanted to own their own home because, horror of horror, there is still aspirational people in this country.

My daughter and her fianc! have just bought a house in Yorkshire, they bought one a similar size to ours at less than a third of the price.

My opinion is that it should go back to being a tax on the super-wealthy, these days that is people with houses in the £2 million plus range in the south, and in the north it should be people with houses in the £1 million plus range. And yes, I do think it should differentiate because prices are very different in the different regions, and it is my belief that it is unfair that people in the North of this island can leave a big house to their kids with little or no penalty.

As you say, the beneficiary has not paid any tax on building up their inheritance. So saying their getting something on which the tax has already been paid is a little disingenuous.

But, your gripe with inheritance tax seems to be your children won't able to benefit as much from your hard work and sacrifice when they inherit. I do understand your sentiments on that.

However, in my case, I've no children or immediate family to leave my estate to, so it's going to friends. Should they be allowed to get a substantial tax free gift from me?

Maybe the rules should be changed, in a similar way as they have for family residences, and any estate left to children of the deceased should be tax free. Would that make you happy?

Enterprise_1701C

uknick wrote: »

As you say, the beneficiary has not paid any tax on building up their inheritance. So saying their getting something on which the tax has already been paid is a little disingenuous.

But, your gripe with inheritance tax seems to be your children won't able to benefit as much from your hard work and sacrifice when they inherit. I do understand your sentiments on that.

However, in my case, I've no children or immediate family to leave my estate to, so it's going to friends. Should they be allowed to get a substantial tax free gift from me?

Maybe the rules should be changed, in a similar way as they have for family residences, and any estate left to children of the deceased should be tax free. Would that make you happy?

That would be ideal, but wouldn't rate it at zero, would simply set a high limit such as a couple of million at which the remainder could be taxed. As you say, we have worked hard and hope to be able to pass this on to our kids if we don't spend it first, we should be able to do that as inflation has caused am imbalance in the affordability of houses.