How many people over 30 aint got a pension yet?

RE: Inheritance Tax

Now there's a classic bit of turning things on their head. Most people are falling liable to inheritance tax due to the value of their property. The people who are currently dying and leaving their property to their children, who then have to pay tax on the excess over the IHT limit, are older people who benefitted from tax relief (MIRAS) on their mortgages until relatively recently, as well as tax relief (LAPR) on their insurance policies. So rather than them having paid tax on the investment, the rest of us have stumped up to subsidise their property purchase. If you have an IHT liability it can usually be resolved by the use of trusts etc. Not for nothing did IHT used to be called a voluntary tax. Most of those who were liable for it avoided it with clever accounting and use of solicitors. Successive governments were on the verge of doing away with IHT altogether as the amount spent on collecting relatively small amounts was considered a waste. But now that property values have increased so much a lot of people will end up paying IHT who never thought they would, and is so valuable to Gordon Brown (about £2billion a year and rising) that there is no way he will scrap it. But it can usually be avoided even now. A simple will can work wonders. But Joe Public says 'I'm not paying £100 to write a will' so their estate ends up paying a bundle in IHT. If you are the child of someone like that, who has an estate think about offering to pay for the will to be written properly, or even invest a few quid a month into a Whole of Life second death policy for Mum and Dad written under trust. You will benefit in the long run.

 

Or at least until

le petit sprog is on the way, when you will of course have to put it off again. This is classic "Tomorrow tomorrow there's always tomorrow, it's only a day away" type thinking. Heard it hundreds of times.

 

Final word on subject - Cost of delay.

Bloke 21 next birthday pays £50 pm level to 65. Total outlay £27,000 - 22% tax relief net cost £21,060. Projected fund value £138,000.

Bloke 31 next birthday pays £100 per month to 65. Total outlay £42,000 - 22% tax relief net cost £32760. Projected fund value £135,000,00

Bloke 41 next birthday pays £200 per month to 65, Total outlay £60,000 - tax relief net cost £46800.00. Projected fund value £129,000.00.

 

Me

Chances of reaching pensionable age? Slim to nil.

 

RE: Inheritance Tax

"You have already paid income tax on it before saving it."

Indeed you have - but someone else is then getting that therefore they pay tax on it.

 

RE: Inheritance Tax

So ? The government's already had one lump of it. What's the justification for them having more ?

 

RE: Inheritance Tax

Because it's a different income stream!

 

RE: Inheritance Tax

Pension payments atract tax relief. ISAs interest and capital growth untaxed subject to certain restrictions.

 

'Income Stream' ???

But what's the justification ? Why are the government entitled to a portion of what someone has worked all their lives for ? They've paid income tax, NI, council tax, tax on all improvements to the home, tax on all savings probably. Tax on income from their pension (which is also immoral imho).

 

RE: 'Income Stream' ???

Because the 2nd person then receiving that has not worked for it have they?

My company pays tax on the profits they make - does that mean therefore I should not pay tax on my salary as the company have already paid tax on that?

It's an entirely seperate income.

 

RE: 'Income Stream' ???

Also the company gets tax relief on the gross wage it pays you and on the employers nic it pays on your behalf.

 

RE: 'Income Stream' ???

thought you as a psuedo socialist would agree with re distribution of wealth via inheritance tax.

Of course the whole reasoning behind it has changed as property prices have risen and the threashold should be raised.

 

RE: 'Income Stream' ???

So what ? Can't we give some people a break ? Old Gordon's trapping more people as property prices rise - which is out of their control. So why are they being punished for it ?

 

RE: 'Income Stream' ???

But as Mr S has stated. The truly wealthy can afford to employ accountants to avoid it. The people getting clobbered are 'normal' working folk who's property value has risen dramatically.

 

RE: 'Income Stream' ???

The loopholes are closing on that. A complex will with trusts etc will cost you £1500-£3000 but save your kids (all 4000 of them) much much more.

 

RE: 'Income Stream' ???

Still think taxing dead folks' stuff is immoral. How else can people afford new Ford Cars ? Tax loopholes should only be closed when I retire. Not before.

 

RE: 'Income Stream' ???

Stop trying to curry favour with yer corporate mates.

 

RE: 'Income Stream' ???

Simple one is to ensure that the family home is owned as 'tenents in common' not as a 'joint tenancy' in a husband wife situation. this should ensure that some of the nil rate band of the first to die is preserved and could save the offspring up to £110,000 on the second death.

 

RE: 'Income Stream' ???

I've just realised I AM a boring Barsteward.

 

RE: 'Income Stream' ???

The main asset most 'normal' hard working families leave to their kids is their property. Not linking the threshold of inheritance tax to the rising value of property is a stealth tax of the worst kind.

Come the revolution.....