£45,000 Inheritance Tax?!?

[Longcol]

When they had that mortgage it wasn't paid off for free, it was paid by them, from their income. Interest rates were higher than they are now, income was of course lower, so the 'paltry' £19000 represented a serious financial commitment at the time. Mortgage tax relief was only on a small proportion - I know, I used to get it.

 

They could have opted on the same income to live in a subsidised council property, spend their income on booze and holidays, and not worry about property.

 

Should their wisdom and investment really be penalised? I have a few hundred K in my house, a few hundred K in my parents property, and perhaps a third, wills depending, will come my way. Lucky old me. But those houses have all been paid for from taxed income, and I fail to see why people who spend their money on bricks and mortar should see it taken from them as reward for their sensible choices.

 

Mortgage tax relief was a damn site more up to the '80's - I remember working in NHS salaries and wages - some top docs had tax codes that meant they got nearly half their salary tax free!

 

My folks managed a couple of good holidays every year after us kids had left home - and my dad has a pretty handy wine cellar thank you.

 

I really can't see why you class property as "a worry" - more like a fast appreciating asset - the appreciation in value absolutely nothing down to my folks "wisdom" - like most folks their generation they "got lucky" with property (and final salary pensions).

 

Sorry but I can't see why I should expect a windfall equivalent to something like 20 years income at the national average wage without the tax man taking a slice - otherwise the gap between the haves and have nots will get even worse than it is now.

[Trabant]

I really can't see why you class property as "a worry" - more like a fast appreciating asset - the appreciation in value absolutely nothing down to my folks "wisdom" - like most folks their generation they "got lucky" with property (and final salary pensions).

I detect some lefty envy here.

Maybe you should persuade them to leave it all to charity?

 

Sorry but I can't see why I should expect a windfall equivalent to something like 20 years income at the national average wage without the tax man taking a slice - otherwise the gap between the haves and have nots will get even worse than it is now.

Forget the value of the property. If you inherit your family home, it doesn't matter whether it's worth £5 or £500k if you want to live in it.

For most people, the value of their house is purely academic up to the point they die, then we're left with the situation where somebody might find themselves with a tax bill of 4 times their annual income in order to remain in their family home.

 

Should we penalise all property owners with a big tax bill just to punish them for being lucky enough to own property over the last 20 years of price rises?

[Guest_225]

Not bad though, £45k for a £400k house for which you've not paid a penny.

 

I don't understand the thinking behind this post.

 

Why should the government get any of the value of the house when it was paid for by income that they had already taxed once?

[Trabant]

I don't understand the thinking behind this post.

 

Why should the government get any of the value of the house when it was paid for by income that they had already taxed once?

For the same reason that socialists don't like the idea of people who study hard, work hard and build a successful career actually earning more and having a better lifestyle than people who can't be bothered and won't push themselves.

That old chestnut: the politics of envy.

[Longcol]

Why should I be envious when I stand to inherit over £350k ??

 

Abolish inheritance tax and we shove more taxation down on to people just as hard working as us who aren't fortunate enough to inherit from hard earning parents who didn't earn enough to buy their own houses, or often found it difficult to get a mortgage if they were on a weekly wage - (scroungers are a different matter altogether).

 

And how many of us will continue to live in our family home - seems like this is an excuse trotted out most of the time by people who don't want a very large windfall taxed. By all means protect those have to remain in the family home - but most of us aren't going to.

[willman]

I didn't suggest 'gifting' the house, I said leave the half of it when one parent dies to someone other than the remaining parent.

 

Any advice given on an internet forum is worth just about as much as the electrons it's printed with, it's just ideas that people should investigate further, not cast iron guarantees of how things should work.

 

 

leaving it, bequeathing it, gifting it all the same in the eyes of the law.

an gifting it causes as many problems as it solves.

 

any advice given anywhere can always be taken seriously and suddenly becomes an urban legend, like being able to sell the house to your kids for a £1.

[Cyclone]

So what do you think happens when you die? You leave it to someone and you get posthumously prosecuted for it?

Gifting and giving would both be things that happen whilst you're alive.

Maybe you could explain what the problem would be with parent A writing a will to leave their possessions (including half the house) to their child when they die, and parent B writing a similar will.

[willman]

So what do you think happens when you die? You leave it to someone and you get posthumously prosecuted for it?

Gifting and giving would both be things that happen whilst you're alive.

Maybe you could explain what the problem would be with parent A writing a will to leave their possessions (including half the house) to their child when they die, and parent B writing a similar will.

 

1.parent a dies - 50% property passes to child/children.

child or children use property as collateral and get into debt then loose second property to bailliff.

2. parent dies leaves 50% to child/children -who hate the remaining parent. they then sell their 50% and make them homeless.

3. parent dies and 50% passes to child/children - surviving parent wants to downsize to a bungalow. but they can't without the approval of the children.

4. as above - the house is sold and nets a profit - the child/children is liable to capital gains.

 

do you really need me to carry on explaining what i advise people of every day of the week.

 

as of today all 4 reasons above have happened to either people i know or family of people i know.

[max]

Not really an incentive to work hard though is it? Just sit around until your parents die then move into their house. We're all living longer now so I should imagine most people would have made their own way in life and not have to rely on someone dying to get a free roof over their heads.

 

IHT, in my opinion, is just the same as capital gains tax except no-one pays it.

[cloudybay]

Not really an incentive to work hard though is it? Just sit around until your parents die then move into their house. We're all living longer now so I should imagine most people would have made their own way in life and not have to rely on someone dying to get a free roof over their heads.

 

IHT, in my opinion, is just the same as capital gains tax except no-one pays it.

 

Totally agree Max. It's not an incentive to work hard. Whilst ever thieving governments of all political persuasions seem hell bent on stealing from those who do work hard yet throw benefits at the feckless, this country will remain unequal. In Dickensian times, money grubbing little Lawyers' invaded the privacy of the poor to value possessions upon death of a family member for the sole aim of the tax grab. Nothing has changed. Probate is a filthy word and one that shouldn't have to be spoken in a civilised society. Children have to sell their family home to pay tax at 40% ? not 5% or 10% but 40%? If a man can leave his wife their home minus inheritance tax, or a civil partner can do the same, why can't I leave mine to the Liberal Party?