Inheritance Tax changes

Keep_pedalling · 5 July 2015 at 6:19PM

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.

How does that mean you lose out? You have no body else to spend your money on, so you are sitting pretty. If the rumoured changes are correct you will have up to £500K to leave tax free. You have no direct descendants to leave it too but you are likely to be able to live in relative comfort for the rest of your life, any money you have left at that point is of no use to you so make sure you make good use of some of it while you still can.

You are certainly right about the £1m headline, the stupidity of the proposal is clearly overruled by the lure of that particular number. If it cost the same to raise everyone's allowance to say £400k it would not have the same headline grabbing figure even though it would be much fairer, and would not screw with the housing market in the same way.

zygurat789 · 6 July 2015 at 8:11AM

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.

Equity release and blow the lot. No chance of an IHT bill then

lincroft1710 · 6 July 2015 at 2:33PM

spenderdave wrote: »

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.

In which time there will be 20 budgets and possibly several changes of government.

fartington · 8 July 2015 at 8:17AM

I need advise

My mum has already downsized recently and the cash is in UK and she is in a flat abroad now. So is this cash taxable over 325 or 500?

will wait til this afternoon, but will still be confused probably, as my case is different to the norm.......

SeniorSam · 8 July 2015 at 12:10PM

It's not different from the norm. Just that perhaps your family did not plan some years ago, as they should have and as many others have.

This tax can be minimised if only the population would take advice rather than stick their heads in the sand and then complain. Perhaps todays budget will help.

Sam

fartington · 8 July 2015 at 12:34PM

what I mean by'my case if different from the norm', is if the new changes do not provide for cash for downsized people or are not retrospective.

as for your comment - hard to plan if most monies tied up in a house. Gifts of a house are invalid if they continue to live there anyway.

plus I have the doublewhammy of only have a single/one parent allowance..

Former_MSE_Paloma · 8 July 2015 at 2:04PM

Parents will be able to leave homes worth up to £1 million to their children without paying inheritance tax from 2020...

Read the full story:

Summer Budget 2015: Inheritance tax threshold to rise to £1m on properties

Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

spenderdave · 8 July 2015 at 4:09PM

Reading the report, the £175k band (actually only that from 2020, it starts at £100k in 2017) is only when the house or its early sale are passed on to 'direct descendents' and implies children and grandchildren. I assume from this that brothers, nieces and nephews don't qualify, and much as I suspected there is nothing in this for single people (or even married couples) with no children.

[Deleted User] · 8 July 2015 at 5:53PM

I wonder if the new iht allowance is retrospective ie widows and widowers who would now have the combined allowance of £650k. Would they now have an additional £350k or £175k tied into their house? A total of £777k or £1000k. I suppose it is in the detail somewhere

However · 8 July 2015 at 8:13PM

The way it's gone for 60 years since marriage, I happen to own the house 100%.
So, my wife after 60 years of marriage dies first.

Does her £175K allowance get transferred to me? Or not?

If not, I will have to go through the rigmarole and expense of transferring the house into joint names to trigger the £175K allowance (worth, ultimately, £70K to our children) so that it can be transferred back again (at more expense).

And if it comes to downsizing, going into care, etc etc, I had better do that transfer before that happens, otherwise presumably only 'my' £175K gets 'reserved' rather than 'our' £350K.

I hope the younger generation, including those now in government, hasn't forgotten that in years gone by it was only the working-spouse who was able to get the mortgage, thus most houses were owned by the working-spouse only.

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