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VFE
30th Nov 2006, 16:57
Folks,

Is it not about time the government abolished or at least raised the inheritance tax margin? House prices rose by 6% last year yet the government only increased the tax margin by 3%. If your property is worth more than £285'000 you'll lose 40% of that to the government upon your death.

My old man just commented that he hasn't worked his knackers off for 45 years, in foreign coutries, risking life and limb, saving every penny he could, scrimpin' and savin' to give his family all he can for the blasted government to take 40% when he snuffs it. He's paid enough tax already and will do for at least another 4 years until retirement at the age of 65. My Dad doesn't consider himself to be in the upper eschelon of society, just a family man who's worked his way up through sheer hard graft in a blue collar job.

VFE.

TBirdFrank
30th Nov 2006, 17:06
Firstly I am reasonably sure that the current exemption is £360k - it was raised above inflation last time round

Secondly the exemption is just that - the first £360k is exempt - taxation is levied on any value in the deceased estate above that figure.

There are devices, use of trusts, property in common ownership with spouse, exempt trades etc, etc, that can be used to reduce - if not completely avoid the tax, but the problem is that Cameron's lot are talking about abolition.

Good on them if they do when they come in - and given Blair's trashing of his record over Iraq would you bet against it this time - but how much trouble do you take with avoidance measures if they are all redundant in a couple of years

Graybeard
30th Nov 2006, 17:10
One thing I've figured out about inheritances:

Those who deserve an inheritance will probably never need it.

Tell the old man to have a good time.
GB

VnV2178B
30th Nov 2006, 17:13
According to the BBC, 2006-2007 is 285000, 2007-2008 rises to 300000.

But do you trust any politician to do in power what they said they would when in opposition?

That's the gamble when it comes to mitigation strategy...

VnV.

VFE
30th Nov 2006, 17:23
Cheers for the info guys - so you're only taxable for any amount above £285'000? I like the idea of a trust..... :E

VFE.

flowman
30th Nov 2006, 17:29
What cheeses me off about inheritance tax, apart from its very existence, is that it is payable on the estate.
I have 4 kids, lets say for arguments sake that Mrs flowman leaves 1,000,000 quid when she snuffs it (lets also asume that flowman has already fallen off his twig). Take away the 285 000 pound threshold and that leaves 715 000 of taxable readies.
At 40% the estate would have to pay 286 000 in tax. That leaves 429000 quid. About 107 000 for each child.
On the other hand an estate left to an only child still leaves 429 000 and one person pockets the lot, same amount of tax paid but a much lower percentage for the individual.
If the cursed tax has to be paid at all it should be paid on the amount received, not on the amount left.
:*
Edited to say that Gordon f%@ing Brown changed the rules (retrospectively) with regard to trusts, so be careful. It could cost you more! ([email protected]!).

None of the above
30th Nov 2006, 17:50
Do a search on 'nil rate band discretionary trust'. Most (all?) hits are to professiional advisers' sites so I won't post a link.

These trusts are a simple and effective way of reducing tax liability on your estate. Not as good as abolition of IHT but it will ease the pain........... until they change the rules.

Loose rivets
30th Nov 2006, 18:20
Was it not a senior member of the Vestie SP? family who's estate paid only £2? upon death. They were inheritance tax experts.


Where there's a will. .......Sorry, couldn't resist :}

Polikarpov
30th Nov 2006, 18:22
The thing that cheeses me off about the whole thing (apart from the gross unfairness of it all; taxing the same money twice, etc.) is that Greedy Gordon wants the money up front practically before the poor departed is even six feet under, rather than waiting until the home is sold and the estate divided among relatives.

My dear grandmother passed away recently and my parents had to cough up soon after for the supposed taxable worth of her (modest) home. Subsequently, the surveyor determined that obvious subsidence meant it was unsaleable without major renovation work and is practically worthless. Is it easy to get the money back? What do you think! And of course, all the time council tax is payable on the residence despite the fact that it's empty and impossible to rent due to being structurally unsound.

Theiving bunch of :mad:s, the lot of 'em; like circling vultures, and not at all pleasant to deal with when coming to terms with a loss.

tilewood
30th Nov 2006, 19:22
"A land fit for heroes to live in!!"

But only if you are an illegal immigrant, MP or donor to the Labour Party!!:ugh:

BOFH
30th Nov 2006, 22:21
Dead people don't vote.

VFE, as others have alluded, there are ways and means. Next time you read through a Telegraph or a Times, see how many titled people die leaving just 285K. Funny that.

It's the widows and spinsters leaving 10K to a cat's home who go with six figures left in the rest of the estate, and forty percent for our mate in Downing Street. Ah well, it'll keep the Kensal Green murderers in hot meals.

BOFH
(and he probably taxes the pennies on their eyes, God rest them)

Jinkster
30th Nov 2006, 23:34
NO tax on land - buy a grouse moor!!

or VFE, get him to buy you a TR

BlooMoo
30th Nov 2006, 23:42
NO tax on land - buy a grouse moor

Jinkster, you sure? Genuine question...

BM:confused:

Aaaaaaaaaaaaaaaargh!
1st Dec 2006, 00:15
But why do you want to inherit anyway? Why don't you make your own way through life instead of sponging off the generation that came before you?

moosp
1st Dec 2006, 01:27
“Estate duty is a voluntary tax, paid by people who trust their heirs less than the exchequer”

Which chancellor said that in his budget speech? I forget.

A big anomaly is that if your spouse is not UK domiciled they get the exemption but then have to pay the tax. There is no transfer of assets at the nil rate to spouses allowed. So as you throw the last sod onto your loved one the exchequer takes 40%. Nice.

With contemporary social mobility and many Brits with non dom spouses this is becoming more common.

ExSimGuy
1st Dec 2006, 03:44
But why do you want to inherit anyway? Why don't you make your own way through life instead of sponging off the generation that came before you?
If the "generation before" want their remaining wealth to go to their kids, why should the government go against this.

I'm probably going to cop around 50k or so when my Mum goes (unless she outlasts me - which I think she';s trying to do :)) and my sister the same. There's a few k more for grandchildren, so it won't affect me (at anything near the current prices and rates) but I agree that it's bloody disgraceful that the government takes damned near half of what those better off really want to go to their family.

"Tax you when living, tax you when dead" - and I want to know how much of it is spent "for the public good", and how much is wasted unproductively:mad:

stickandrudderman
1st Dec 2006, 07:51
and I want to know how much of it is spent "for the public good", and how much is wasted unproductively:mad:

You cannot be serious! Productively? Please!:sad:

airborne_artist
1st Dec 2006, 08:37
You need a good solicitor, trust me. My father left an estate of about £1m, of which 50% came to my sister and me. No tax was paid.

Jinkster
1st Dec 2006, 09:05
According to my old man - no inheritance tax on agricultural land - i'd check to be sure!

VFE
1st Dec 2006, 10:38
But why do you want to inherit anyway? Why don't you make your own way through life instead of sponging off the generation that came before you?
You are quite right. I shall now happily donate any money that comes from my father in years to come to the government so those lovely people who never lift a finger in their life can continue claiming their Job Seekers Allowance, Income Support and Single Parent allowances etc.... You have made me see the light. Why should I, as next of kin, be entitled to it when all these other people out there who never met my Dad are far more deserving.

Thank you 'Aaaaaaaaaargh!' - it's not often I meet a saint who can show me the error of my ways. I am sure my Dad would prefer his money to go to the government in this fashion too. So smiles all round. :rolleyes:

VFE.

TBirdFrank
1st Dec 2006, 13:38
Correct - Agricultural Holdings are exempt, but that does not include the farm house.

So - under current law - pass the land down - own the farm house in two equal shares - in trust

Not many farm houses are worth £600k in isolation - pop off one by one -

Net Tax Bill - Nil -

But don't have any money left!

Lexxy - no reading this!

Skypilot
1st Dec 2006, 14:12
I'm with Aaaaaaaaaaaaaaaargh! on this one.

The money's going to come from somewhere, so surely it's better to tax the dead (after all, they have no more use for it) than to tax the living more heavily? Then let the next generation succeed on its own merits and not those of others.

Choxolate
1st Dec 2006, 14:15
WATCH OUT for the trust stuff. My dad died recently soon after his second wife (my mum died about 30 years ago and he remarried at 72!!)
Because both my dad and his second wife had kids of their own they (in effect) split the value of the house into two trusts. When one died the value of their "share" of the house was kept in a trust for their kids to be paid when the other one died. All clear so far?

Well the revenue now say that because my dad had use of the house (in total for 6 months after his wife died) it should be added IN TOTAL to his estate for Inheritance Tax calculations as he had "excusive use of the asset" even though the actual money from the proceeds goes to her son. So we are left with a Tax bill on money that we will never get.

We are currently appealing against this, but to make it even more inequitable the house took 6 months to sell after my dad died and the revenue are now claiming (AS WELL AS OUR IHT) that the son had full access to the asset after my dad died (even though the son never lived in or even visited the house except to sort out some possessions) and they are therfore reassessing the IHT on his mother's estate.

In effect the house (worth about 300k) is being taxed at 40% on 600k (or a total of 240k in TAX) as it is being taxed on BOTH estates leaving a total of 60k to be spilt between both estates.

This is almost unbelievable but totally true - the thieving, grasping vultures - let's hope the appal succeeds.

Written in anger at the [email protected] who are meant to repesent us but just screw us about!!!!

frostbite
1st Dec 2006, 16:11
Sorry, I know this is thread drift and I deserve a spanking (!)


My parents divorced a long time ago. My Mother was awarded the house as settlement, and continued paying the mortgage. Her useless [email protected] solicitor failed to protect the property against my Father borrowing circa £3k against it via another bent (he was struck off) solicitor.

She tried to get the house registered in her name but the Land Registry refused on the grounds of the £3k charge by a now deceased lender and wound-up company.

She then obtained an Order from a Judge in Chambers to have the title changed - the Land Registry are still refusing!