Reply With QuoteOriginally Posted by The Local Boy wrote on Mon, 13 April 2015 14:00
IHT was a tax to effect the rich, as the values haven't risen at the same time as property prices plenty of "average" people have started slipping into it.Raising the value should keep the normal person out of the tax and keep it exclusive to the rich, can't see why people would disagree with that.My mother has moved into the bracket, not because she is wealthy or anything just a lucky property purchase 30 years ago. She's a sales assitant in a bookies working past her retirement age, hardly rich.Did you read the thread Tru?Only 6% were liable this last year rising to about 10% by 2020 if kept the same.Just to add if your mam just crept in to the bracket, She'd only pay on the excess over £325,000/£650,000. Still a very nice inheritance.Her house is worth £330k, so technically speaking she'd only have to pay £2k. Not a great deal in the grandscheme of things, but if the threshold doesn't rise at the pace of property prices that is clearly going to go up.Whilst split between three of us it will still be a decent inheritance, it will be left to three "average" kids. One a web developer, one an Electrician and one who works in a hotel and lives in rented accommodation with two kids. Hardly super rich people paying tax like the original idea was meant to be for.I personally think that IHT should apply to the recipient as opposed to the deceased.So you get an allowance on values that you inherit, makes loads more sense to me.a £1m estate left to 5 siblings could see each receive £200k and at the present threshold no IHT would be payable.If you lower the threshold to say £100k to counter this a single child inheriting a property worth £150k would be subject to a £20k tax charge.This tax above all is subject to the law of unintended consequence.Well those are some very nice made up numbers and assumptions, thanks for those.I wouldn't have those kind of allowances. Say you kept it at 325 (sounds reasonable as that's a single persons allowance now) and you had 3 siblings inheriting a 1m estate, would see them pay 3.2k each instead of 50k each under the current system.It would be 150k for a single child but in all fairness that leaves them with 850k still, and I think some sort of sliding scale would be more appropriate than a blanket 40%estates are quite often left to more than just children so the single child allowance doesn't really work, unless you meant single beneficiary allowance which is still open to abuse. for example, what happens if I leave £649,999 to my sole child and £1 to my neighbour? there are two beneficiaries - do we still have a £325k allowance per recipient meaning no tax to pay?Another consideration is that the majority of IHT is not paid when people die but when people set up trusts. if IHT is levied on the beneficiary and not the estate what happens to the 20% IHT and ten year charge when assets are transferred into and out of trusts? does this very good source of income for the government disappear as the estate is no longer subject to IHT?
