Eight ways to save Inheritance Tax

A discussion forum for the elderly, their carers and advisers
andrew54
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Post by andrew54 » Tue Mar 28, 2006 4:15 pm

andrew54 wrote:
I see the problem being the extra people, the solution being extra houses plus extra water supply.

Maybe I didn't make myself clear.

The problem is extra people. To solve the problem we need 2 things.....

1. extra houses.

2. extra water supply.


I agree that the extra water supply has not yet been done, but I don't see that the government should be condemned for building the houses. Building the houses is part of the solution so they should be applauded, the second part of the solution is still required (more water supply).

If you want to criticise the government for neglecting the supply of water then I will agree with you.

subjecttocontract
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Post by subjecttocontract » Tue Mar 28, 2006 4:53 pm

I think that having some of you middle class gardening types paying more in inheritance tax is great.

If the Revenue were getting less tax from you they might be wanting more from me......and that certainly wouldn't do.....worse still if you the really poor and disadvantaged among us might have to cough up.

Lets face it, for most of you, any tax demand is going be annoying. Still if grumbling makes you feel better........

despair
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Post by despair » Tue Mar 28, 2006 5:22 pm

A mega rich guy with 3 houses in 3 countries thinks that working class gardeners should pay more tax of all kinds to keep him in beer and skittles

Thats precisely what this government has done

Robbed to poor to give to the rich

Conveyancer
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Post by Conveyancer » Tue Mar 28, 2006 6:19 pm

despair wrote:Thats precisely what this government has done

Robbed to poor to give to the rich
No, that's the Tories' job. They should sue!

It was the doubling of VAT and the reduction in the higher rates of tax that shifted the tax burden to the poor.

All these people who worry about death duties have probably paid more in VAT through their lives than is going to be paid on their estate. Let's not forget that death duties do not apply until your estate is 275000 pounds. I don't think that anyone who inherits that sort of money has too much to complain about.

subjecttocontract
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Post by subjecttocontract » Tue Mar 28, 2006 6:30 pm

Let's not forget that death duties do not apply until your estate is 275000 pounds. I don't think that anyone who inherits that sort of money has too much to complain about.

Excellent point.....and its been described as one of the few taxes that is voluntary. The better off know how to mitigate their IHT liability. So, instead of moaning about your lot, take some professional advice. Their are still many opportunities to limit your exposure and protect your assets for your benficiaries

andrew54
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Post by andrew54 » Tue Mar 28, 2006 6:48 pm

subjecttocontract wrote:Let's not forget that death duties do not apply until your estate is 275000 pounds. I don't think that anyone who inherits that sort of money has too much to complain about.

Excellent point.....and its been described as one of the few taxes that is voluntary. The better off know how to mitigate their IHT liability. So, instead of moaning about your lot, take some professional advice. Their are still many opportunities to limit your exposure and protect your assets for your benficiaries
But should you "limit your exposure"? The less inheritance tax that is paid, then the more we all have to pay in VAT and Income Tax.

despair
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Post by despair » Tue Mar 28, 2006 6:50 pm

Only if you are mega rich

A typical 3 bedroom semi detached in the South is now priced well over the £275,000 threshold and all trusts have now retrospectively been blocked by the Chancellor's latest budget

So the ordinary person has no hope of avoiding a tax levied on already taxed income that was used in the struggle to pay a mortgage

This amounts to double taxation

22% on original income plus 40% on anything over £250,000 equals 60% and its hitting very ordinary working folk

The mega rich are sqealing about tax at 40%

andrew54
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Post by andrew54 » Tue Mar 28, 2006 7:03 pm

despair wrote:........ all trusts have now retrospectively been blocked by the Chancellor's latest budget
Good!!! Another 'fiddle' has been stopped.


despair wrote: ........and its hitting very ordinary working folk
But it only hits them after they are dead!

.

subjecttocontract
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Post by subjecttocontract » Tue Mar 28, 2006 7:17 pm

But should you "limit your exposure"? The less inheritance tax that is paid, then the more we all have to pay in VAT and Income Tax.

I think its OK to take any legitimate action to limit ones tax liability....whatever and from wherever that tax liability arises . My experience is that people who 'suddenly' find themselves liable to IHT, instead of taking the smart approach of finding out out how to minimise it ......they put their energies into complaining instead.

Only if you are mega rich

That depends on how you define 'mega rich'. People have different opinions. No doubt you think yours is the correct one ?

.............. and all trusts have now retrospectively been blocked by the Chancellor's latest budget

WRONG.

So the ordinary person has no hope of avoiding a (IHT) tax levied on already taxed income ...........

WRONG....that would depend on circumstances

beagle
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Post by beagle » Tue Mar 28, 2006 8:19 pm

despair wrote:all trusts have now retrospectively been blocked by the Chancellor's latest budget

Err, no they haven't.

beagle
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Post by beagle » Tue Mar 28, 2006 8:32 pm

Just out of curiousity Despair . how much did your parents leave you ?

The reason I ask is that many people currently worrying about their estate being hit by inheritance tax inherited very little or nothing from their own parents. Ironically many of them have children who are not actually that bothered about what they will inherit eventually. I cannot think of one person of my acquaintance of my generation who thinks their parents 'should' leave them anything, we all tend to think that our parents should spend it now. As Thatchers children we all absorbed the message that it is up to us to go out and earn our own way not rely on what we might be left.

This leaves a 'sandwich' generation who didn't inherit but want to leave to their own children and bitterly resent any taxation on what they might leave. I suspect that just as Your parents generation would never have bothered themselves about IHT (unless they were landed gentry with 'death duties' to think about) my generation won't be that bothered about the IHT that will be levied on our estates after we are gone.


IMHO the problem with IHT is not that it exists, my attitude is that you should spend everything you can before you go and your heirs should think themselves damn lucky if you leave them enough to have to pay tax on. No for me the problem is that more and more poeple are going to be living longer and longer, often in ill-health. In an ideal world we would all know when we will die and how much our care will cost in the interim, unfortunately we don't so in spending everything we can we run the risk of leaving ourselves unable to pay for our own care. On the other hand if we save every penny toward nursing home fees we run the risk that we could be run over by a bus tomorrow and leave the lot to our off-spring who may have to pay IHT on it - which is a problem if you really object to the concept of IHT.

There are still plenty of ways to 'protect' your estate, and indeed many people are unclear as to what exactly is taxable under IHT. The mantra absorbed by everyone studying this area is "Don't let the tax tail wag the dog". IHT is not the most important consideration in estate planning, making adequate provision for your own future should come first.

despair
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Post by despair » Tue Mar 28, 2006 9:30 pm

My parents left me nothing because like most of their generation they had nothing

While i fully agree that no child has a right to expect anything to be left to them i find it equally iniquitous that since one has to live in something unless you sell your house and spend the lot while renting something (which most people do not like to contemplate ) it is totally inevitable that in the South even the proceeds of a very modest home purchased with taxed money will attract additional tax at 40%

As for your claims that there are ways to reduce / minimise the IHT liability that is nonsense unless you are very rich and have liquid capitol you can afford to dispose of during your lifetime........i have attended more than enough seminars on the subject

It is the fact that IHT is now hitting those in very modest homes and who have lived on modest incomes that is so iniquitous

IHT was designed to hit the landed gentry not the postman and his wife who went without luxuries all their life and exist on a small pension plus their state pension

beagle
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Post by beagle » Tue Mar 28, 2006 9:32 pm

despair wrote:As for your claims that there are ways to reduce / minimise the IHT liability that is nonsense unless you are very rich and have liquid capitol you can afford to dispose of during your lifetime........i have attended more than enough seminars on the subject
As a mere student of the subject I bow to your obviously superior knowledge.

beagle
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Post by beagle » Tue Mar 28, 2006 9:36 pm

despair wrote:IHT was designed to hit the landed gentry not the postman and his wife who went without luxuries all their life and exist on a small pension plus their state pension
'designed' by whom ?
Are you seriously saying that no tax can ever be changed/extended/re-designed ? Should we all still be paying the 'ship money' that was one of the triggers of the civil war ??

Pennyfarthing
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Post by Pennyfarthing » Tue Mar 28, 2006 10:14 pm

This is spooky because I have just come home ... from an Inheritance Tax Seminar!! :lol: I have got a pile of stuff to read through as well. There ARE still lots of ways of getting around it and the main thing they kept on about was making a will in the first place!

I went because a lovely friend of mine died last year and she had brought up 5 children on her own (Hubby ran off with younger model when youngest was 18 months old). They have just paid a whacking load of Inheritance Tax and she would have turned in her grave. :roll: She never had any spare cash and knew every trick in the book for feeding 6 on a small budget. She had a battered old banger, never had a holiday, all her clothes came from charity shops etc. But she did have a house which had soared in price over the 25 years. The house was sold and proceeds split 5 ways - well 6 actually because the tax man had a massive chunk. She scrimped and saved so much that I just think that's terrible and I know that she would have wanted to give the children every penny she could and not the taxman.

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