Apparently IHT on may not be too bad?

Phossy

SouthCoastBoy said:

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?

Understood - but not the point i was trying to make. When your gone, your gone

german_keeper

SouthCoastBoy said:

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?

Is that a realistic possibility though? Assuming sufficient property value for the exemption, everyone has half a million before IHT is due. And the surviving member of a couple has a million. Not likely to run out of money by trying to doge IHT surely.

poseidon1

RogerPensionGuy said:

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. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

Pat38493

poseidon1 said:

RogerPensionGuy said:

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. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

My situation is not to dissimilar - personally I would be happy to downsize to pretty much anywhere in the country (or another country) but my wife prefers to stay near her current friendship group, and wants to keep at least a couple of spare bedrooms.

My argument that for the amount of time in any given year that we have visitors, it would be cheaper to pay for them to stay in a hotel down the road, doesn’t seem too popular.

She also has health issues that mean in my opinion she would be better off moving further south to somewhere where it is not so cold in the winter, but I guess having strong social connections is also important for many people, so it’s understandable in many ways.

We have 5 bedrooms today so the compromise is that we are currently trying to sell our house and downsize to a 3 or 4 bedrooms house.  We are looking at lower cost areas to get more value, but not more than 40 minutes drive from where we are now.  This is in line with quite a few recommendations I have seen which say you should try to downsize while you are still comparatively young and better able to deal with the stress of moving home.

SouthCoastBoy

german_keeper said:

SouthCoastBoy said:

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?

Is that a realistic possibility though? Assuming sufficient property value for the exemption, everyone has half a million before IHT is due. And the surviving member of a couple has a million. Not likely to run out of money by trying to doge IHT surely.

I think so, especially if you have no children and own your own house

Albermarle

poseidon1 said:

RogerPensionGuy said:

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. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

It maybe sounds a bit pathetic to someone single, but there is a lot of mileage in the phrase ' Happy Wife, Happy Life '

If your friend forced a move ( if possible) and it did not work out, then he would not be having a very happy old age.

german_keeper

SouthCoastBoy said:

german_keeper said:

SouthCoastBoy said:

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?

Is that a realistic possibility though? Assuming sufficient property value for the exemption, everyone has half a million before IHT is due. And the surviving member of a couple has a million. Not likely to run out of money by trying to doge IHT surely.

I think so, especially if you have no children and own your own house

Yes that's a fair point, I suppose we tend to look at things from our own perspective. One regular poster, possibly sea shell, has made this point in the past. Seems a bit if an odd one to me; I think the property exemption applies to children, grand-children and step children so presumably that's the vast majority. Why not just make it applicable to all beneficiaries, even the local cat sanctuary.

I've always been a big believer that one can't really say "if that was me I would do this or think this" because your beliefs and opinions are directly related to your personal circumstances. Having said that here we go!! If I was single or married/in a relationship, with no kids I am not sure I would give two hoots about what happened to my assets when I shuffled off. To me the issue here would be whether I want the right to distribute my wealth myself rather than trust the government of the day to do it for me, at least with a proportion of my assets. I don't think I would care but maybe I would.  

RogerPensionGuy

A bit of drifting here, but accommodation and housing are a fairly big chunk of this IHT for many estates. 

One pick up of many that stayed in my head over the years was the following. 

I often heard people had sorta planned to move house and/or county in later life, early 60s was often the very loosely planned time zone. 

Life got busy and plans weren't made and then it's mid or late 60s or even later when the rocket is FAB ready and results were ofter much different than the loose plans that were in minds decades beforehand. 

However I saw another bunch of people that planned well in their 40s and early/mid 50s and planned making the changes in their late 50s, early 60s of before 65.

Like much in life, the early planners and actually doing it people seem to of managed it well and really enjoyed the changes, options, opportunities, financial possibilities and lifestyles. 

Many of us work for 40 or 50 years, hopefully plan pensions and financial stuff, but neglect to plan other stuff in out lives. 

zagfles

Albermarle said:

poseidon1 said:

RogerPensionGuy said:

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. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

It maybe sounds a bit pathetic to someone single, but there is a lot of mileage in the phrase ' Happy Wife, Happy Life '

If your friend forced a move ( if possible) and it did not work out, then he would not be having a very happy old age.

It sounds pathetic to someone married  There's the possibility of compromise eg stay local so still in contact with friends but move to somewhere smaller, and get a sofabed for visitors. 

RogerPensionGuy

zagfles said:

Albermarle said:

poseidon1 said:

RogerPensionGuy said:

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. 

There is also an intractable  mindset issue.

A friend of mine just hitting 70 says he would have happily decamped from  their 4 bed house  (owned over 40 years) to something smaller in the shires and free up spendable capital as a bonus. His wife will have none of it. Determined to stay in the locality where her longstanding friendship group reside, and retain the excess bedrooms for the rare occasions grown up sons return for short visits.

I feel a little sorry for him since from my single carefree perspective , he seems to be a hostage to his spouse's wants and desires in terms of where and how they live. 

Outside of this example, I professionally encountered many widows who could not see the benefit of downsizing from large family homes they could no longer really manage, but resisted any exhortation by their children to sell up and downsize, more often than not on entirely sentimental grounds.

Would like to think this sentimentality of the boomer generation in such matters will be slowly replaced by a more analytical sense of realism by the generations that follow, but I wouldn't bet on it.

It maybe sounds a bit pathetic to someone single, but there is a lot of mileage in the phrase ' Happy Wife, Happy Life '

If your friend forced a move ( if possible) and it did not work out, then he would not be having a very happy old age.

It sounds pathetic to someone married  There's the possibility of compromise eg stay local so still in contact with friends but move to somewhere smaller, and get a sofabed for visitors. 

I know a few people, couples who downsized locally making life much much more relaxed, more time with local friends and the community, plus lots more ability to travel, holidays, see people, see family all over the place and few months overseas during the UK winter is a real nice break.

However, I know couples who get their pension TFLS and move house locally to get another bedroom they don't need to keep up with the Jones. 

It takes all sorts.

***

Just watched the link below and it talks about different generations, savings, pensions and the crazy housing market etc. 

***

https://youtu.be/bRkg4RtOa-M?si=UMRNrj1KCxSBUnSx