BRFR Cake Stop 'breaking news' miscellany

[Dorset Boy]

This.

TBH, I was surprised that the threshold was/is pretty high, with the first £1mn tax-free. The fact that my parents' house went from £2000 in 1960 to £450k in 2020 was a a completely an unearned bonus in the estate, and if it had been £2mn, paying tax on the second million wouldn't be the sort of thing I'd be moaning about.

That's just under 9.5% pa growth over 60 years, but you have excluded the improvements they will have undoubtely made, along with the costs of maintenance. Inflation over the same period was 5.5% pa give or take. So not all of it will have be unearned and some was due to inflation.

 

[First Aspect]

See my other post - the increase in the value of a parent's house hasn't "already been taxed" in most cases.

It will be taxed when it is sold.

 

[briantrumpet]

That's just under 9.5% pa growth over 60 years, but you have excluded the improvements they will have undoubtely made, along with the costs of maintenance. Inflation over the same period was 5.5% pa give or take. So not all of it will have be unearned and some was due to inflation.

You obviously didn't know my parents. It wasn't quite a Museum of the 1960s, but not far off. Any improvements (new bathroom & kitchen, eventually) were merely done to make it more pleasant to live in, not as any sort of investment to be passed on when they died.

 

[briantrumpet]

It will be taxed when it is sold.

Yes, as IHT, obviously. I'm not sure what point you're making. It seems a pretty fair tax: the threshold is relatively high, and the inheritors have done nothing to 'earn' it, other than being born and not pissing off their parents enough to be disinherited.

 

[First Aspect]

Yes, as IHT, obviously. I'm not sure what point you're making. It seems a pretty fair tax: the threshold is relatively high, and the inheritors have done nothing to 'earn' it, other than being born and not pissing off their parents enough to be disinherited.

Stamp duty etc.

There is an argument it should go under CGT, to be honest.

The question was why it is unpopular, and the answer is it is a high % tax levied on someone's death. It seems an arbitrary tax to many people, at a cruel time. It is quite simple and would be relatively easy to re brand, make broader based and less unpopular.

 

[PurplePenguin]

One of my hobby horses is that CGT should apply to main residences with some form of roll over relief.

 

[First Aspect]

One of my hobby horses is that CGT should apply to main residences with some form of roll over relief.

I think my feeling is that IHT doesn't generate much tax revenue, except for people who can't afford to avoid it, who end up paying an awful lot. These tend to be the same estates that have already been drained by 6 and 7 figure care costs. IHT should have a different name, be lower, broader based and more difficult to avoid.

 

[PurplePenguin]

I think my feeling is that IHT doesn't generate much tax revenue, except for people who can't afford to avoid it, who end up paying an awful lot. These tend to be the same estates that have already been drained by 6 and 7 figure care costs. IHT should have a different name, be lower, broader based and more difficult to avoid.

As per Dorset Boy's post, I don't think it is that easy to avoid.

 

[First Aspect]

As per Dorset Boy's post, I don't think it is that easy to avoid.

Depends how rich you are. I suppose that applies to lots of other taxes.

 

[Pblakeney]

You obviously didn't know my parents. It wasn't quite a Museum of the 1960s, but not far off. Any improvements (new bathroom & kitchen, eventually) were merely done to make it more pleasant to live in, not as any sort of investment to be passed on when they died.

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.

 

[Pblakeney]

So you really haven't answered the question. For many in London, moving to a different part of the country isn't a practical option.

It is a choice. Doing nothing is a choice. Choices have consequences. IHT is the end result of choices.

 

[First Aspect]

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.

Eh? Surely they'd be boasting about the value of someone else's house?

 

[First Aspect]

It is a choice. Doing nothing is a choice. Choices have consequences. IHT is the end result of choices.

People don't necessarily have those choices. Moving away from ones community in old age is life shortening, and dementia is normally a problem before people know that they need to do something about it, whereupon they no longer have the same choices.

 

[Pblakeney]

Eh? Surely they'd be boasting about the value of someone else's house?

I meant pre-death. Anywhere from mid-40s onwards.
There are plenty of people alive who are complaining about the onset of IHT. 😉

 

[Pblakeney]

People don't necessarily have those choices. Moving away from ones community in old age is life shortening, and dementia is normally a problem before people know that they need to do something about it, whereupon they no longer have the same choices.

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.