Inheritance Tax?

Question

There should be mass protest regarding this terrible tax. I cant afford to get on the property ladder and still live at home with parents and if they die I will have to sell their hse to pay 40% to the gov and probably buy a caravan. Its a disgrace. What can we do???

Poor little rich i am not! I am from England and this tax now applies to most people certainly in London who own an average property, thats why im complaining, so get your facts right first! It used to affect the rich but now it affects the working class which i am.

Answer 1

I completely agree

and i don't understand why people are being negative about this question.

This isn't a rich persons tax - this hits everyone. If the inheritance is over a certain amount, which no doubt it will be due to property - you get hit,

My ex boyfriend's parents died at Xmas, and although they weren't rich - he got hit with it. Something you don't need at such a horrible time

My mother has realised she will be hit with it too when the time comes. Again, she isn't rich. She lives on her own trying to live off a nurses salary.

The inverse snobbery of this country really winds me up. We are one of the highest taxed countries in the world, and now the government tax people AFTER they've died, regardless of the the fact they've been paying taxes all their lives

Answer 2

You obviously didn't protest when it did only affect the rich so why do it now. You don't have a moral argument. I suppose you wouldn't care about the homeless until you were one. If, after paying the tax you are left with 60% of the value of a house in London be happy with that. You put nothing into it so why complain. Many people can't afford to get on the housing ladder but they are working towards it not thinking of how the governments going to tax them when their parents die.

Answer 3

All the fuss now, the tax has been around since 1984, now the issue is, that the threshold will increase over the coming years.
It is currently £285,000 per person, so in effect your parent combined have a potention nil tax liability on the first £570,000 but it works buy doing some estate planning to see how you can minimise or infact have 0 tax pay when they die, if they transfer property to you, and they survive 7 years then on that property (land or anything else) there will be nothing to pay.
There are so many ways to minmise liability, best get in touch with a estate planning solicitor, the charge to arrange is far more economical then paying a large amount of tax.

Answer 4

It is a disgrace - I assume you live in the UK.

Americans who answer dismissively may like to know that the threshold here equates to about $450,000 - or less than the average price of a house in many parts of the UK - and everything above that is taxable at 40%.

It would be much more reasonable if it were set at US levels. In America, your estate must be worth at least $2 million - or about £1.2m UK - before any tax is payable, and even a $5m estate attracts only around a 12% net tax.

But the worst bit about IHT is surely the timing: after all, what you really need when you've just lost a close relative is a nice form from the taxman so he can take a big chunk of what they left you.

Answer 5

Some of the posts here are wrong about only affecting millionares. Many houses have increased in value to the point where they have reached the minumum bracket where inheritance tax applies. That's not including all the other assets that may apply including hard earned savings. The argument is that many normal people who've worked hard and saved all their lives will leave their children with massive tax bills. So there are many questions. Is inheritance tax moral, meaning should children benefit from the work of their parents or do you believe in distribution of wealth? Is the qualification bar set too low? Is the percentage too high? I don't know the answers, to be honest...

Answer 6

I love how people think that this only hits the ultra rich....yet they don't see that this is now hitting people at $200,000 which is well within the range of most housing costs now. If you already were taxed once the government should not be able to tax you again just because you died......hell they would be saving money by not having to pay you SSI anymore.

7 years before you die? Do you know or can you anticipate your own death....I don't think so.

Answer 7

We did not have to pay taxes on my mothers, but we had to do her personal income tax and pay it, divided by four it wasn't much but my brothers complained. They liked that check though, I had enough to buy a paid for home,car,pay off all my bills, and buy each one of my daughters a used car and give them a couple thousand. I think you will come out ok. I live in the USA. Why are you worried about your parents dying while they are still here, are you over 18, if so take care of yourself till they die and the money they leave you will add to the life you have built for yourself.

Answer 8

If you parents transfer their assets to you 7 years before they die then the Inheritance Tax does not apply.

They could sell a half share of the house you're living in for some low amount like £1 now (7 years before they die), then when they do pass on you'll only pay interitance tax on the proportion of the house they own.

Answer 9

Do you actually know about it? You do know that the first 375,000 pounds is completely untaxed and it's only the remainder of the estate which gets taxed at 40%. In anyone's language 375000 quid is plenty to at least get a decent deposit on a flat wherever you live.

I do know it seems very unfair and I agree with you that it shouldn't apply to anyone but the uber rich. Join the daily express crusade!!!

Answer 10

If you have to pay 40% to the gov then the house is worth several million dollars. (of course I'm assuming US taxes, you didn't specify the country)

So yes, with the remainder you would be able to buy a caravan. Heck, you could buy the whole circus....