Apparently IHT on may not be too bad?

Sea_Shell

As a childless couple, these new rules would mean that on second death, we (our estate) would have an ADDITIONAL IHT bill of ~£95,000.   

We only get a joint IHT allowance of £650,000.    Which isn't much really, when you own a house worth £400k

Our IHT bill would already be ~£38,000, as it stands. 

   

RoysV

Sea_Shell said:

As a childless couple, these new rules would mean that on second death, we (our estate) would have an ADDITIONAL IHT bill of ~£95,000.   

We only get a joint IHT allowance of £650,000.    Which isn't much really, when you own a house worth £400k

Our IHT bill would already be ~£38,000, as it stands. 

   

Similar to me. Single no kids, have a partner but don't live with her. At present IHT would be £13000 using the new rules IHT would be £108k

incus432

We’re a couple doing exactly that. Rattling around in a big house. Our close friends are doing exactly the same.

The problem we face is a lack of anything desirable or aspirational to move into.  I can’t help thinking this is a failure of local (and national) planning. In this country we are beholden to less than 10 development companies who build identikit houses on tightly packed estates with insufficient parking or green space. I would love to move out of my house, but can’t find anything I would want to move into.

My elderly parents want to move back into the town from a nearby village but they need a small bungalow. Of the nearly 1500 new builds near us they haven’t built a single bungalow. The council tried to push the developers to include some on the last new build but in vain.

I nearly choked on my cornflakes when I saw the current government characterise the planning system as being blocked by NIMBYs. Nothing could be further from the truth. From what I’ve seen locally the developers decide what and where they want to build and dare the planning department to stop them. If blocked they appeal to the planning inspectorate who overrule the decision.

Add to that the high transactional costs of moving home (stamp duty is a terrible tax just gumming up the works IMO) which can easily be 50k+, not to mention the incredible stress of the process.

DT2001

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

You can split the ownership of the land and farmhouse to reduce the size of the estate. 

As tax rules change we have the option to adapt. It is not always what we want or see as ideal however the situation is rarely as black and white as made out in the press. We do not have large DC pensions (£300k each) but it pushes us into rethinking the timing of gifting, source of retirement income and deaccumulation. Sometimes we benefit from changes (property relief from IHT and carry forward of spouses allowances) and sometimes not.

zagfles

QrizB said:

Albermarle said:

I suspect the expression 'mass affluent' would apply to most regular contributors, rather than 'wealthy' .
The latter phrase would in most peoples minds relate to people living a luxury lifestyle, which does not seem to be the case on here. 
Although I think there is a fair smattering of Millionaires, who still go looking for bargains in Lidl 

The difference in financial privelege seen on this board between the Pension forum posters and eg. Debt-Free Wannabe can be quite jarring if you visit both of them!
I'm not judging anyone here, just comparing the user base.

Rather that "financial privilege" I'd say "financial management ability". There are plenty of people here living and managing perfectly OK on an income far less than some people posting their SOAs on DFW. 

SouthCoastBoy

zagfles said:

QrizB said:

Albermarle said:

I suspect the expression 'mass affluent' would apply to most regular contributors, rather than 'wealthy' .
The latter phrase would in most peoples minds relate to people living a luxury lifestyle, which does not seem to be the case on here. 
Although I think there is a fair smattering of Millionaires, who still go looking for bargains in Lidl 

The difference in financial privelege seen on this board between the Pension forum posters and eg. Debt-Free Wannabe can be quite jarring if you visit both of them!
I'm not judging anyone here, just comparing the user base.

Rather that "financial privilege" I'd say "financial management ability". There are plenty of people here living and managing perfectly OK on an income far less than some people posting their SOAs on DFW. 

Nothing like an acronym. I have no idea what that last sentence means? Lol

QrizB

SouthCoastBoy said:

zagfles said:

QrizB said:

Albermarle said:

I suspect the expression 'mass affluent' would apply to most regular contributors, rather than 'wealthy' .
The latter phrase would in most peoples minds relate to people living a luxury lifestyle, which does not seem to be the case on here. 
Although I think there is a fair smattering of Millionaires, who still go looking for bargains in Lidl 

The difference in financial privelege seen on this board between the Pension forum posters and eg. Debt-Free Wannabe can be quite jarring if you visit both of them!
I'm not judging anyone here, just comparing the user base.

Rather that "financial privilege" I'd say "financial management ability". There are plenty of people here living and managing perfectly OK on an income far less than some people posting their SOAs on DFW. 

Nothing like an acronym. I have no idea what that last sentence means? Lol

SOA - Statement Of Affairs. Basically a household budget that identifies where all the money goes.

DFW - Debt-Free Wannabe. The MSE forum area where people go to get help with managing their debts (in much the same way that they come here for help with managing their pensions).

Phossy

Sea_Shell said:

As a childless couple, these new rules would mean that on second death, we (our estate) would have an ADDITIONAL IHT bill of ~£95,000.   

We only get a joint IHT allowance of £650,000.    Which isn't much really, when you own a house worth £400k

Our IHT bill would already be ~£38,000, as it stands. 

   

Surely that focusses the mind on spending the money rather than worrying about a tax (or a pot of money) you'll never see.

SouthCoastBoy

Phossy said:

Sea_Shell said:

As a childless couple, these new rules would mean that on second death, we (our estate) would have an ADDITIONAL IHT bill of ~£95,000.   

We only get a joint IHT allowance of £650,000.    Which isn't much really, when you own a house worth £400k

Our IHT bill would already be ~£38,000, as it stands. 

   

Surely that focusses the mind on spending the money rather than worrying about a tax (or a pot of money) you'll never see.

The problem is how much to spend and when as you don't want to run out of money. Maybe an annuity is the solution for some?

RogerPensionGuy

bjorn_toby_wilde said:

ader42 said:

LHW99 said:

The probelsm is many farmers live on the farm, and even when the children take over most of the heavy work, they will still be helping out at busy times. They will often have nowhere but the farmhouse to live, so if they try to pass it on earlier, unless they have enough income to pay a commercial rent to the children, it will become a gift with reservation.

It is however quite straightforward to split a farm house from the fields, sheds etc. into a separate land registry title and hence a separate “property”.

They can keep the house and gift the rest. 

I know someone who did just this very thing a couple of years ago very easily and cheaply.

I suspect the reason farmers don’t pass on their “wealth” before they die is the same as other persons; self-interest in being a matriarch / patriarch and perhaps fear of needing to fund care. I’m sure we all know single elderly people rattling around in big houses, I do. Old people need to start passing their wealth down the line before they retire imho. better that than giving it to HMRC. 

We’re a couple doing exactly that. Rattling around in a big house. Our close friends are doing exactly the same.

The problem we face is a lack of anything desirable or aspirational to move into.  I can’t help thinking this is a failure of local (and national) planning. In this country we are beholden to less than 10 development companies who build identikit houses on tightly packed estates with insufficient parking or green space. I would love to move out of my house, but can’t find anything I would want to move into.

My elderly parents want to move back into the town from a nearby village but they need a small bungalow. Of the nearly 1500 new builds near us they haven’t built a single bungalow. The council tried to push the developers to include some on the last new build but in vain.

I nearly choked on my cornflakes when I saw the current government characterise the planning system as being blocked by NIMBYs. Nothing could be further from the truth. From what I’ve seen locally the developers decide what and where they want to build and dare the planning department to stop them. If blocked they appeal to the planning inspectorate who overrule the decision.

Yes indeed planning has been so inadequate on so many fronts. 

Many couples or singles living in big houses due to so may dynamics, many young people living and renting 3 people in a 3 bed flat or somtines 4, 5 or 6 in a 3 bed flat. 

There's no quick fix unfortunately, house ownership mobility in the UK is just so problematic, hassle and extremely costly, it's a crazy situation, but I expect it to get worse.