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Bear Goggles

Tory's 'family Home Allowance' (Iht Cut)

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Cameron fights back against Milliband's populist non dom tax crackdown election pledge by... Erm... Cutting tax for rich people.

http://www.bbc.co.uk/news/election-2015-32271505

The new "family home allowance" will be transferable on the death of one spouse and can be added to the existing £325,000 transferable allowance to bring the tax-free total up to £1m.

After all, got to look after hardinheriting families.

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They promised to raise the IHT threshold to £1M in their 2010 manifesto (link in my sig).

They didn't do it in this term, why would they do it in a subsequent one?

we will raise the inheritance tax threshold to £1 million to help millions of people who aspire to pass something on to their children, paid for by a simple flat-rate levy on all non-domiciled individuals.

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They promised to raise the IHT threshold to £1M in their 2010 manifesto (link in my sig).

They didn't do it in this term, why would they do it in a subsequent one?

They didn't do it because they didn't win the election and that was one of the things that got jettisoned in the coalition agreement.

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They promised to raise the IHT threshold to £1M in their 2010 manifesto (link in my sig).

They didn't do it in this term, why would they do it in a subsequent one?

The media was speculating something like this would be in the budget.

I'm guessing;

1) Some sort of change to IHT (possibly moving the threshold to £1 million). The wanted to do this but the Lib Dems have always vetoed it but they will have nothing to lose (and lots of votes to gain by doing it just before the election).

It was hyped up in the press at the time too, and HPIers were getting excited about it.. helping to limit prospect of HPC. (not you fru-gal).

And previous to that in 2014... although with it being deliberately held at level below since 2009... (unless there was any tickup in last budget that I didn't notice)... it seems they have something of an appetite for IHT revenue, despite loving up possibility of £1m IHT on family homes in electioneering. Already very generous with that double-relief for married couples.... as I understand it... if one spouse dies the other gets their IHT allowance to add onto their own.. and when they die, they can leave an estate of upto £650,000 tax free?

15 Oct 2014

Prime Minister David Cameron has hinted that the inheritance tax threshold could rise before next year’s general election in May.

The suggestion was warmly received by Telegraph readers given the long freeze in the threshold. It has been held at £325,000 per person or £650,000 for married couples, since 2009 dragging more families into the inheritance tax net.

And more will follow. These levels, where the 40pc tax charge begins, will remain until 2017-18.

The latest figures from HM Revenue & Customs, published in July, show "death duty" takings had risen to a six-year high last year, pulling in £3.4bn, up from £3.1bn in the previous 12 months.

But raising the threshold before next year’s election in May will prove difficult with the Conservatives locked into the Coalition with the Liberal Democrats. Today Mr Cameron said it would take "some time" for any change to be introduced. [..]In March Mr Cameron said: "We put in our manifesto that we wanted to take it to £1 million but we did not win an outright majority [and] the pledge did not make it into the Coalition agreement. "It's something we'll have to address in our election manifesto."

http://www.telegraph.co.uk/finance/personalfinance/tax/11163663/Will-the-inheritance-tax-threshold-really-rise-before-next-years-election.html

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Two obsessions combined. Houses and Round Number Syndrome. All the reports concentrate on the UKs religion - 'housing as an investment'. I should think the £175k increase to the individual allowance is actually for all assets. Secondly the opportunity to parrot the magic number a 'million'. The proposed allowance is actually £500,000 per person......Sorry I meant HALF A MILLION.

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What will this mean to marriage?..... Only for the rich.....marriage is a financial and legal transaction...not required to love.

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Why allow this only on housing? Surely they, being the party of business should they be applying this to inherited companies first. Oh sorry I forgot, Dave the EA only worries about hardworking houses.

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To be fair IHT cuts are a pretty popular policy. Even though it only affects something like 6% of estates, it feeds into the delusion of HPI 'wealth', especially for the key boomer voter demographic, so it's probably good politicking.

But there is a strange irony that the Labour Party announce a populist 'tax the rich' policy in the last month of an election campaign, and the Conservatives react by announcing a populist tax cut for the rich.

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Why allow this only on housing? Surely they, being the party of business should they be applying this to inherited companies first. Oh sorry I forgot, Dave the EA only worries about hardworking houses.

It helps cement the Conservatives as the party of HPI.

We may scoff on here, but the over 65s are the Tory's key demographic. Go figure.

Edit:

Here's a screenshot this week's populous poll. Over 65s voting Conservative is the biggest single UK voter trend.

poll.png

post-80-0-48300000-1428826640_thumb.png

Edited by Bear Goggles

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£175,000 here, £175,000 there and pretty soon youre talking £1,000,000,000 per year transfer from the poor & young to the wealthy.

Who knew the country was bankrupt and we were all in it together!

Edit: I notice that even if youre ALREADY DEAD you can transfer £175,000 house allowance to your surviving widow/widower. They really do love their HPI these rich Tories and their chums. Plus it's regressive, pro-cyclical and more red tape. Pavlovian dog whistle stuff for London/SE

Edited by R K

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I think an important question to ask is how will this inheritance money get shielded from care home fees?

Indeed. Like the pension cash in policy, one way or another some of it will trickle up to Tory vested interests in the City.

But at this point, since we will have a coaltion again or minority these manifesto promises are mostly intended as bargaining chips. So if Labour/Tories go into a grand coalition to protect the Union from the SNP, Tories can negotiate away their non-existent IHT pledge on the basis Labour negotiate away their Mansion Tax. Net result - London/SE home owners benefit (for example)

Edited by R K

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I think an important question to ask is how will this inheritance money get shielded from care home fees?

Suspect this is the point, raising inheritance tax (like the new pension system) encourages old people to hang on to money that then can be taken to fund their care...

Edited by debtlessmanc

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Suspect this is the point, raising inheritance tax (like the new pension system) encourages old people to hang on to money that then can be taken to fund their care...

Yeah, but they can use their tax savings to hire an accountant to find a way to hide it from the tax man. I'm sure there are ways.

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I think an important question to ask is how will this inheritance money get shielded from care home fees?

It won't?

Suspect this is the point, raising inheritance tax (like the new pension system) encourages old people to hang on to money that then can be taken to fund their care...

But don't care home fees get taken from the estate first before any distribution to any other beneficiaries?

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Care home fees are bizarre.

When my grandma-in-law was in a £1k a week dementia home she had to pay tax on her pension+private pension+money for renting out her house. This meant we had to raise £1.2k for every £1k spent on care home fees.

Once she died all her remaining money and assets were passed on tax free.

It just seemed wrong to me that whilst she was alive she was still being taxed even though far more than 100% of her income was being spent on nursing fees yet once she died the inheritors can take hundreds of thousands tax free.

Edited by Timak

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It won't?

But don't care home fees get taken from the estate first before any distribution to any other beneficiaries?

Inheritance tax is relatively easy to avoid, care home fees aren't

care home fees are taken monthly from a living persons account, there will therefore be a charge for at most a month against a dead person's estate. My mother in law went senile and was in a care home for more than 5 years, she had no money the council paid, must have been £250K's worth of care. The govt future exposure to these costs is colossal.

Edited by debtlessmanc

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Care home fees are bizarre.

When my grandma-in-law was in a £1k a week dementia home she had to pay tax on her pension+private pension+money for renting out her house. This meant we had to raise £1.2k for every £1k spent on care home fees.

Once she died all her remaining money and assets were passed on tax free.

It just seemed wrong to me that whilst she was alive she was still being taxed even though far more than 100% of her income was being spent on nursing fees yet once she died the inheritors can take hundreds of thousands tax free.

more bizarre than that..

if she had given all her money to you one week before was diagonosed with dementia and then lived 7 years, you would have got the lot with no care home fees to pay and no inheritance tax...

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Inheritance tax is relatively easy to avoid, care home fees aren't

care home fees are taken monthly from a living persons account, there will therefore be a charge for at most a month against a dead person's estate. My mother in law went senile and was in a care home for more than 5 years, she had no money the council paid, must have been £250K's worth of care. The govt future exposure to these costs is colossal.

Usually the council will take a charge over the person's house, even if it is owned jointly.

They then sell the house on death of the surviving spouse recouping the care home fees plus interest.

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Usually the council will take a charge over the person's house, even if it is owned jointly.

They then sell the house on death of the surviving spouse recouping the care home fees plus interest.

Distant family member, realised his mother was getting "forgetful", sold her house and put her in a home, she gave hime the proceeds of the house sale. When she was diagnosed with dementia one year later, she has no assets to take and the council have to prove that you were given the money to avoid care home fees. In practice that is very difficult.

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As someone whose parents don't own a million-pound house (and they have four kids), it looks like I really have 'missed the boat'.

The winners and losers were all decided long before I was born - the fathers of the new property owning dynasties picked out - and no matter how hard I work I'll never close the gap between my station and that of even the lowliest of those born above me.

Welcome back to serfdom, Britain. Did you think you had escaped?

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As someone whose parents don't own a million-pound house (and they have four kids), it looks like I really have 'missed the boat'.

The winners and losers were all decided long before I was born - the fathers of the new property owning dynasties picked out - and no matter how hard I work I'll never close the gap between my station and that of even the lowliest of those born above me.

Welcome back to serfdom, Britain. Did you think you had escaped?

Excuses, excuses.

You should work hard at school, go to University (£27k in fees), then use that education to earn 3x the national average income (£75k).

From this you'll take home £45k after tax, NI and student loan repayments. Then live very frugally spending only £20k a year on housing and general living costs. You now have £25k a year to save

In 40 years time you'll be in the same financial position as a someone who inherits £1m tax free because their parents bought a 3 bedroom house council house under RTB in Notting Hill in the early 1990's.

How is that unfair?

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There is no way they can do this. They couldn't do it in this government in which they will have gotten more votes (in 2010) than in the coming election. They will not form a majority so they will have to be in coalition. However, they will not even be able to form a workable coalition at the moment because of the drop in support for the Lib Dems. Even with Lib Dem support, the Lib Dems would veto this so it would never happen. It is all words to try desperately to get some Tory votes.

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Cameron got as many votes as he did in 2010 by moving to the centre - 'compassionate Conservatism', 'hug a hoodie'. Even gay rights. And many on this board thought they were making the right economic noises..

If they're giving up on all that and promising bribes in order to pitch solely for the votes of the old, bitter, privileged, and greedy, then I hope they get hammered.

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Cameron got as many votes as he did in 2010 by moving to the centre - 'compassionate Conservatism', 'hug a hoodie'. Even gay rights. And many on this board thought they were making the right economic noises..

If they're giving up on all that and promising bribes in order to pitch solely for the votes of the old, bitter, privileged, and greedy, then I hope they get hammered.

All i can see happening is a hung parliament, or perhaps a labour/SNP coalition. Someone, sometime is going to have to tell the country that the deficit is unsustainable and the party is over, perhaps a hung parliement could do that as they can then blame each other.

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