I've been wondering since that restoration programme started - how did we come to a point where so many of these stateley homes fell into disrepair?

Could it be that inheritance tax is to blame?

I know we in Sheffield tend to take a 'bash the posh' angle on these matters, but shouldn't this tax only be applied to houses that are sold within say 25 years of the relavant death?

How many people (ordinary people too) loose their family home in this fashion? Just cos an extended family lives in grandma's house shouldn't leave the younger family members facing the sale of the property to pay the death duty, should it?

When does a house cease to be a home and become 'property'?

What are your views??

inheritance tax applies to the full estate of a person and is only applied somewhere upwards of 250k.
People who have those kinds of assets tend to also have a solicitor and plan ahead so as to avoid the majority of inheritance tax. And if it's a family with a stately home i expect they plan it very well.

Id agree with cyclone that people with stately homes, or similar substantial assets are likely to have prepared well for inheritance tax etc.

But these days 250k of assets isnt a great deal. IIRC the 250k bracket hasnt moved for decades - my parents bought their first house for 5k - so 250k was a fortune. I bought my first house for 30k - which seemed alot then! Now the price of an "average" house is close to what? 100k? 120k? Hrm...180k according to the beeb - seems like the "average"detached house is over 280k !

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

It seems like more and more people are going to get nobbled by inheritance tax in the future - and not just the super-rich elite - but relatively "average" people. (whatever that means :P)

Exactly, it's the 'average' people who are loosing out again... My parents worked hard for what they have, so why should we have to pay a ridiculous amount of inheritance tax on their assests when they have already paid 40% of their earnings that were used to buy their house to begin with?
I agree with Edd, 250k is completely outdated. But even for larger, stately homes, the inheritance tax could be crippling and then lead to more momeny being spent at a later date to restore it.
Just seems like yet another way to get our money...

Originally posted by beckyaa
I agree with Edd, 250k is completely outdated. But even for larger, stately homes, the inheritance tax could be crippling and then lead to more momeny being spent at a later date to restore it.
Just seems like yet another way to get our money... Well, as I said, when does your HOME become PROPERTY? Sureley that's when you choose to convert it into cash? :confused: Otherwise it's just the roof over your head.

And I must disagree with cyclone, where does a well heeled family get the money to pay inheritence tax for a property as large as a stately home? And it is such a responsibility being charged with maintaining such a place for the generations to come. These homes were built to be the home for all family members for hundreds of years. How does a person deal with being the member of the family who has 'lost' this home for the succeeding generations when 300 years worth of ancestors have managed to pass it on safely?

Does any single person really 'own' such a place? I know the 'legal' answer is 'yes', but that's why I suggest 25 years without sale should prove non-asset status for any property.

And as we all become more affluent, we are all feeling the effects of this state money grabbing.

i didn't say that they get the money anywhere to pay the inheritance tax, I said they avoid paying using clever accounting and clever solicitors.

Inheritance Tax

Most of the scaremongering about Inheritance Tax is created by greedy financial advisors.
In most cases when either the husband or wife dies the property can be passed to the surviving spouse without incurring inheritance tax.
It does however become due when the property is left to the kids or other relatives.
There are dozens of shifty schemes claiming to circumvent the tax.Most involve setting up various Trusts for which the financial advisor and his legal mates will extract a few thousand quid.The Chancellor is already seeking retro payments for many
of these schemes.
Now that the Endowment scam has been rumbled the financial advisors need fresh fields to plunder and Equity Release and Inheritance Tax Avoidance are the current bait.

what scaremongering?

and who would be stupid enough to think that it applied when your spouse died, it's clear that it applies when passing from 1 generation to the next.

There are ways to mitigate the amount of IT that will be paid.

For example, an annual gift exemption of £3000 applies, so distributed between 2 children + their 2 spouses + their 2 children allows a family to pass on assets worth £24,000 per calendar year. So with a little bit of forethought and planning it's not unreasonable that say £240,000 could be passed on in advance of someones death. In order to take advantage of this though you have to survive for 7 years post give giving, otherwise it falls under the clawback.

Originally posted by Cyclone
For example, an annual gift exemption of £3000 applies, so distributed between 2 children + their 2 spouses + their 2 children allows a family to pass on assets worth £24,000 per calendar year. So with a little bit of forethought and planning it's not unreasonable that say £240,000 could be passed on in advance of someones death. In order to take advantage of this though you have to survive for 7 years post give giving, otherwise it falls under the clawback. So how exactly do you pass on a whole house by this method?

a few bricks at a time?

try asking a financial advisor or solicitor.

And what happens if someone dies suddenly and unexpectedly? Or ends up living to be 112, you can't predict that, and I don't think you should have to.

Originally posted by beckyaa
And what happens if someone dies suddenly and unexpectedly? Or ends up living to be 112, you can't predict that, and I don't think you should have to.

i didn't make the rules, i was just expressing my belief that with planning it is possible to avoid the majority of the inheritance tax burden.

Sorry cyclone, I know what you mean, and forward planning is currently the only way to avoid inheritance tax, I just don't think you should have to. And it can be difficult to do as you can't predict when someone is going to die.

I agree.

You work all your life, being taxes at 40% (assuming a good wage).

Anything you spend whilst alive is again taxed at 17.5%, anything you save and pass onto your children is taxed once again at 40% (above 240k).

So (ignoring national insurance) on your gross earnings for life > 34k you can only actually pass on 36% to your children unless you do plan it carefully and not die unexpectedly.
And you can only spend 50% of your gross earnings.

And if you add on the burden of all the stealth taxes and licenses for this that and the other the figures are probably even lower (might just about balance out the <34k and <240k inheritance).

Makes you think.

My Dad is currently doing his best to get rid of assets so we don't get hammered on inheritance tax (of course he has to find ways of doing this that avoid capital gains tax...).

He's not a rich man, he's just worked really hard and led a relatively prudent life (well, as best you can with 4 kids). It's not his fault the housing market has gone nuts and the value of our family home now puts his estate over the threshold.

When does a house cease to be a home and become 'property'?

I've not thought of it this way before. Why should we have to pay to live in the house we grew up in if we so choose? :mad:

Does anybody know when and why inheritance tax was introduced?

The idea is a redistribution of wealth.

"That sounds a bit of a pinko concept" I hear you say, but that is about the size of it.

The idea is it stops money just working its way up to the top and staying there. It isn't really effective enough at that because the gap between rich and the rest in this country is growing all the time.

Originally posted by Yodameister
The idea is a redistribution of wealth.

"That sounds a bit of a pinko concept" I hear you say, but that is about the size of it.

The idea is it stops money just working its way up to the top and staying there. It isn't really effective enough at that because the gap between rich and the rest in this country is growing all the time.

That does actually sound like a nice idea, but like you say it's not working. And as mentioned before it doesn't affect only the rich people at the top any more - it affects really ordinary families like mine as well, who are comfortable, but with 7 grandchildren don't really have enough "wealth" to redistribute to everyone else!

Hmmm...I'm starting to wonder whether there's a point to working hard all your life.:suspect: Where's the nearest DSS office...:rolleyes:

Exactly pussycat, it's just dragging people down again. My granparents used to live in a council house, worked hard and saved hard, as did my parents, and so do I, and now feel like we're being punished for it!

I don't think redistribution of wealth is a good enough answer - as cyclone pointed out, aren't we being taxed more than enough already, and surely that is what the tax is supposed to do!

Well to be perfectly honest I would think that anyone who is affected by inheritence tax IS quite comfortably off - in comparison to the bottom 10% of the population.

Redistribution isn't just about the super rich.

Yes, they are quite comfotably off and they pay tax to help the bottom 10% of the population!! Why should we pay tax on what has allready been taxed?

And anyone affected by inheritance is an awful lot of people since the inheritance tax threshold doesn't rise with house prices.

The original question asked what the purpose of the introduction of inheritence tax was.

As I understand it, it is redistribution of wealth. The rest of the tax system does have effects of redistribution, but that wasn't the reason that income tax was created - it was created before redistribution was thought about.

i thought the original question was whether stately homes fell into disrepair because of income tax, and the answer seems to be no.

Why all this worry about whether your estate will attract inheritance tax? Just don't have any left at the end of your life. With the average mortality age rising to over 80 people's children should be well established and not in need of inheriting wealth. If they aren't, then perhaps they shouldn't have hung on waiting until their parents died.

Originally posted by max
Why all this worry about whether your estate will attract inheritance tax? Just don't have any left at the end of your life. With the average mortality age rising to over 80 people's children should be well established and not in need of inheriting wealth. If they aren't, then perhaps they shouldn't have hung on waiting until their parents died.

most people would like to be able to leave something to their children. And unless you're requirement for a house diminshes as you get older then spending everything you have isn't quite that simple. Even 'releasing the equity in your home' as many finance companies would love us to do isn't a great plan unless you can name to the day when you will die.