BRFR Cake Stop 'breaking news' miscellany

[First Aspect]

Again, it is the result of choices made earlier on in life. I am fully aware that old age sneaks up on you but people should start to think about these things while in their 50s. Around the same time they are planning retirement for example.

I think you are being unrealistic tbh.

But the philosophical point I think PP is making is that such planning shouldn't be necessary (i.e. productive) and my point is that it shouldn't be such a cliff edge that forces Hobson's choices onto people.

 

[icowden]

So, say you live within Z3 in London, so your 3 bed terrace is "worth £1.3 million", and then you have a pension and investments.
You are 65-70.
Do explain how you would avoid paying any inheritance tax.
And don't suggest selling up and moving to another part of the country.

The most obvious is that my wife dies and leaves me the house. No IHT is due, but when I die I leave the house to my kids. I get both her threshold and mine and thus IHT is only payable on £300,000 at 40%. So £120,000 of IHT is due.

If I have the money for a good accountant then I set up a Trust, put my house into the Trust and hope to survive for 7 years.

 

[Dorset Boy]

The most obvious is that my wife dies and leaves me the house. No IHT is due, but when I die I leave the house to my kids. I get both her threshold and mine and thus IHT is only payable on £300,000 at 40%. So £120,000 of IHT is due.

If I have the money for a good accountant then I set up a Trust, put my house into the Trust and hope to survive for 7 years.

You absolutely don't put the house into trust.
You would have to pay the trust the open market rent on the property or it is a gift with reservation. you then have the absolute nightmare of the trust having to pay CGT on sale, all the accounting faff each year and the hassle of getting the property sold.
And if you put the house into a trust, you do not get the residence nil rate band as you have left it to the trust not your kids.
And accountants don't set up trusts btw.

Inheritance Tax revenues to Rachel are £7.1 billion so far this tax year.
A not insubstantial sum, and up on the same period last year by about £100 million

 

[Pblakeney]

I think you are being unrealistic tbh.

But the philosophical point I think PP is making is that such planning shouldn't be necessary (i.e. productive) and my point is that it shouldn't be such a cliff edge that forces Hobson's choices onto people.

I'd say the opposite. I am the one being realistic and planning for how things are rather than how I'd like them to be.

 

[Pblakeney]

GPs to be paid £3k for prescribing weight loss drugs.
Seems like easy money on one side and the potential for unintended consequences on the other.

 

[First Aspect]

I'd say the opposite. I am the one being realistic and planning for how things are rather than how I'd like them to be.

Do you have to move out of your house to avoid it? Bear in mind there's a £500k exemption that doesn't apply to most people in most of the country, but disproportionately captures most of some areas, and fairly modest homes.

 

[Shortfall]

In my mind there was a key switch in the 90s (IIRC) when houses stopped being homes and became investments.
This along with selling off council houses was the birth of today's housing crisis.
I find it funny that those moaning about IHT are often the ones boasting about the value of their house.

I think it happened before that. There was huge inflation after the war and I think it was a deliberate policy of government(s) to inflate away the real value of our national debt. Peop!e saw their savings ravaged and their earnings shrinking in real terms and they quickly realised that owning your own house was a great hedge against that.
So far as IHT goes, whatever the merits of otherwise it wouldn't grind my gears so much if I didn't think that the government of the day weren't just going to pour it into the vast black hole where they seem to waste most of our money.