Inheritance Tax

Grumpy_chap

kuratowski said:

The 4% figure is backward looking.  A lot of the households with million-pound estates haven't died yet.

A lot of the household with £1m estates won't have £1m estates by the time IHT might be due.
People often downsize and release a chunk of equity, which they spend before death.

Andy_L

A lot of estates are leaving (almost) everything to a spouse so there is no IHT to pay regardless of the size. It would only be on the death of a survivor that it would then attract IHT.

Albermarle

 media commentators on the left always say that it affects only 4% of estates.

Whilst media commentators on the right ( particularly The Telegraph, Mail and Express) scare their readers about IHT to the point, that many think they will pay IHT when they never will.

The reality is that it is currently 4% of estates, but this is predicted to slowly rise over the coming years.

People with large pension pots can die with well over a Million and still not pay any IHT as the pot is not counted in the calculation. This may or may not get changed at some point.

uknick

Cloth_of_Gold said:

uknick said:

Your estate can pay inheritance tax if you leave £500,001 after funeral costs.  So, no need to be a millionaire.

Would only be £325K though for an unmarried person with no children/grandchildren though surely.

Yes, you're quite right.  I should have used that lower figure to emphasise my point and show your estate could be nowhere near the £1m mark to pay IHT.  

Jaco70

kuratowski said:

The 4% figure is backward looking.  A lot of the households with million-pound estates haven't died yet.

Good point.....I hadn't really factored that in.

Jaco70

Albermarle said:

 media commentators on the left always say that it affects only 4% of estates.

Whilst media commentators on the right ( particularly The Telegraph, Mail and Express) scare their readers about IHT to the point, that many think they will pay IHT when they never will.

The reality is that it is currently 4% of estates, but this is predicted to slowly rise over the coming years.

People with large pension pots can die with well over a Million and still not pay any IHT as the pot is not counted in the calculation. This may or may not get changed at some point.

I'm glad I asked the question now, as the answers have been interesting.
I hadn't given any thought to lots of the estates still having living spouses, which obviously skews the percentage subject to IHT considerably.
Also, I didn't know that pensions pots are outside IHT.