IHT changes on the way?

[Nimrod103]

I'll be gobsmacked if they reduce IHT.

Well, press reporting that rate is going to be halved to 20%.

Can't see how this will win votes though. The 4% it impacts likely vote Tory anyway.

I've never quite understood why the 4% is so low. I guess for starters because there is no IHT between spouses, IHT is only paid on death of the survivor, so you could say it actually affects 8% (assuming everyone had a spouse). Then there are those very rich who have put in place robust IHT avoidance mechanisms, so perhaps adds 2%. Making IHT affect 10% who will almost certainly be Tory voters who are currently wondering whether to stay home during the next general election. Then it is also a geographically based tax, mainly penalizing English people living in the south of England - that's hardly fair for a start anyway - I don't know how it escapes the equality and race relations act.
OTOH it will put out of business a whole raft of rules, regulations and financial advisers whose whole existence depnds on trying to avoid IHT. It will concentrate efforts on true investment in productive things instead.

What's not to like.

[Wuffle]

Fine, halve IHT.
Then legislate to double it each time a second generation has to pay it.
Some will learn a lesson or two about fair.

W.

[scrumpyjack]

It affects virtually everyone who owns a house in the south east, plus their children, plus their grandchildren. So it isn't surprising that lots of people don't like it and regard it as a tax on accumulated income that has already been taxed.

It is undeniable that cutting it is electorally popular even if that seems irrational to some

[Lootman]

I'll be gobsmacked if they reduce IHT.

Well, press reporting that rate is going to be halved to 20%.

Can't see how this will win votes though. The 4% it impacts likely vote Tory anyway.

IHT is detested by many more people than that however. Many folks hope or expect to be rich, even if they are not now. And others think that it is just wrong to tax death. Moreover the allowances have been frozen for a long time now, and if we are not going to raise them, then at least lower the rate.

And if a 20% rate stops many people from taking aggressive steps to avoid paying IHT then it may not even cost that much in lost tax.

[Mike4]

Labour keeping very quiet about there tax plans but sure will include high inheritance taxes. Socialists don't believe in inheritance as its unearned by the recipient.

I'm not sure Lefties believe in people keeping any of their income, however it is obtained. Isn't a communist principle that the state decides what each of us gets, regardless of our output?

"From each according to his ability, to each according to his needs"

~ Marx ~

[CliffEdge]

The trouble is IHT for the ordinary person is unavoidable as you can't avoid dying.

[Lootman]

The trouble is IHT for the ordinary person is unavoidable as you can't avoid dying.

But a lot of tax, borrow and spend lefties complain that IHT is in fact too easy to avoid, even labelling it a "voluntary tax".

I'm not sure Lefties believe in people keeping any of their income, however it is obtained. Isn't a communist principle that the state decides what each of us gets, regardless of our output?

"From each according to his ability, to each according to his needs"

~ Marx ~

Lefties are obsessed with relative wealth. They think taxes should only ever go up if you are well off, seeing you as having "surplus" wealth, ripe for plucking.

[CliffEdge]

The trouble is IHT for the ordinary person is unavoidable as you can't avoid dying.

But a lot of tax, borrow and spend lefties complain that IHT is in fact too easy to avoid, even labelling it a "voluntary tax".

Lefties fall into two groups: those with nothing, and those with everything (all nicely tidied away from the taxman's clutches).

I can understand the first but deplore the second.

[DrFfybes]

I've never quite understood why the 4% is so low. I guess for starters because there is no IHT between spouses, IHT is only paid on death of the survivor, so you could say it actually affects 8% (assuming everyone had a spouse). Then there are those very rich who have put in place robust IHT avoidance mechanisms, so perhaps adds 2%.

According to this calculator...
https://www.varbes.com/your-money/net-w ... culator-uk 15% of households have over £1m in assets.

This one suggests 18% https://www.projectfinanciallyfree.com/ ... ulator-uk/

That would suggest the 7-9% will pay IHT unless they divest themselves of assets in the future.

[JohnB]

Elsewhere on these boards are extensive discussions on how much money you need to retire with to ensure you don't run out before death. Dying with £500k left shows you have clearly won the financial game at least. Of course its a shame if you die a few years early because an underfunded NHS failed you.

[tjh290633]

Elsewhere on these boards are extensive discussions on how much money you need to retire with to ensure you don't run out before death. Dying with £500k left shows you have clearly won the financial game at least. Of course its a shame if you die a few years early because an underfunded NHS failed you.

One of the main considerations is the ability to pay care home charges, should the need arise. If that need does not have to be met, then you are likely to be liable for IHT.

If you are of a charitable disposition, you can avoid IHT that way, by making charitable bequests framed appropriately.

TJH

[Lootman]

Elsewhere on these boards are extensive discussions on how much money you need to retire with to ensure you don't run out before death. Dying with £500k left shows you have clearly won the financial game at least. Of course its a shame if you die a few years early because an underfunded NHS failed you.

One of the main considerations is the ability to pay care home charges, should the need arise. If that need does not have to be met, then you are likely to be liable for IHT.

If you are of a charitable disposition, you can avoid IHT that way, by making charitable bequests framed appropriately.

At least with charitable bequests you control where the money goes, rather than have a politician decide who gets your involuntary support.

If my aim is not to die broke, then it is certainly at least to die without the government getting any more than the large amount it has already had out of me.

[vand]

I think the Tories know the next election is unwinnable and are doing the usual thing that parties do when they are facing the prospect of a very heavy defeat and trying to shore up their core vote.

There is probably still another budget before the election so they will probably save tax cuts for the working classes until then.

[JohnB]

Of course when May tried to introduce a pooled scheme for care home charges, it was labelled a Death Tax. So local councils go bankrupt trying to handle their social care obligations when hamstrung from raising Council Tax. "Tax is fine provided someone else pays it, I want to keep my money to myself to pay services privately, never mind the inefficiencies and over-commitment of funds"

[MrFoolish]

Lefties fall into two groups: those with nothing, and those with everything (all nicely tidied away from the taxman's clutches).

I can understand the first but deplore the second.

What a load of rubbish. I guarantee you have no stats to support what you say.

[Mike4]

Lefties fall into two groups: those with nothing, and those with everything (all nicely tidied away from the taxman's clutches).

I can understand the first but deplore the second.

What a load of rubbish. I guarantee you have no stats to support what you say.

I'm inclined to agree. There are loads of lefties who are nice, middle-of-the-road, middle class people who just haven't thought about it properly. They just vote left as a knee-jerk emotional decision.

Oh and it is just soooooo trendy to be a leftie and to say so loud and often. And so deeply unfashionable to mention voting Tory.

[CliffEdge]

What a load of rubbish. I guarantee you have no stats to support what you say.

I'm inclined to agree. There are loads of lefties who are nice, middle-of-the-road, middle class people who just haven't thought about it properly. They just vote left as a knee-jerk emotional decision.

Oh and it is just soooooo trendy to be a leftie and to say so loud and often. And so deeply unfashionable to mention voting Tory.

I count them as floating voters. Usually float to the right as they age.

[Midsmartin]

I wonder if reducing the rate to 20% would have a much smaller impact on revenue, as some people will be less tempted to take avoidance measures.

My personal view, irrelevant of course, is that it's better to tax someone when they're dead than when they are alive. But the many avoidance schemes available to the very wealthy makes it unfair to beneficiaries. I'd be in favour of closing some of the loopholes where possible, and having a tax rate, eg 20%, that might feel more broadly acceptable.

[MrFoolish]

I'm inclined to agree. There are loads of lefties who are nice, middle-of-the-road, middle class people who just haven't thought about it properly. They just vote left as a knee-jerk emotional decision.

Oh and it is just soooooo trendy to be a leftie and to say so loud and often. And so deeply unfashionable to mention voting Tory.

Sounds like you are getting your excuses in before the Tories lose the next election. "Oh, those Labour voters didn't think it through". Rather patronising.

[Midsmartin]

Or possibly they vote left because they have thought deeply about things, but reached different conclusions.