The Lemon Fool

I suspect most people will have seen the speculation in the media about cuts to IHT, one article is on the BBC here...

https://www.bbc.co.uk/news/business-67448602

If you haven't watched the F1 and plan to then you might want to wait, as despite qualifying only having been over a few minutes the Beeb has managed to put live updates down the side of the article.

Quite what the chages will be is not clear, but as there seems a commitment to freeze the £350k personal allowance then either an increase in the rather restrictive and IMO unfair Primary residence allowance, or a reduction or perhaps tapering of the percentage like Stamp Duty.

Paul

DrFfybes wrote:£350k personal allowance

£325K?

Scott.

Rather scandalous that all these budget proposals seem to leak from the Treasury. In my youth nothing was known until the budget speech.

I suppose it s deliberate, so that Hunt can see the public reaction before finally deciding what to do.

scrumpyjack wrote:Rather scandalous that all these budget proposals seem to leak from the Treasury. In my youth nothing was known until the budget speech.

I suppose it s deliberate, so that Hunt can see the public reaction before finally deciding what to do.

Sorry to sound a grumpy, cynical old bugger, but by 'public reaction', I think that 'newspaper reaction' would be closer to the truth.

Steve

PS Why can't the UK copy other countries and make the allowance much, much higher? Even in highly taxed Italy, the allowance is 1 million euros and a low % tax after that. In the USA, I think it's even better.

scrumpyjack wrote:I suppose it s deliberate, so that Hunt can see the public reaction before finally deciding what to do.

I'm sure that is the main reason, though I also suspect it puts into the minds of the public that there will be be significant changes or reductions in a tax, when in fact what emerges will be a very minor tinkering.

The simple fact is that tax thresholds have not been uprated with inflation for several years, in the case of IHT not for 15 years. This is a scandal which the current Govt has done nothing about.

They must cut spending now, and refashion the economy to be much more productive.

If you wanted to reduce the IHT tax take, the best thing would be to restore the allowances squeezed by inflation, simplifying the lives of those dragged across the boundary. But Tories do like taking money from the poor and rewarding the richest, so I suspect a reduction in the 40% rate.

It will make it a narrow window to pop off granny before Labour reverse the changes.

stevensfo wrote:
PS Why can't the UK copy other countries and make the allowance much, much higher? Even in highly taxed Italy, the allowance is 1 million euros and a low % tax after that. In the USA, I think it's even better.

In the US I believe the tax free allowance is $26 million for a couple, though that does include lifetime gifts.

JohnB wrote:If you wanted to reduce the IHT tax take, the best thing would be to restore the allowances squeezed by inflation, simplifying the lives of those dragged across the boundary. But Tories do like taking money from the poor and rewarding the richest, so I suspect a reduction in the 40% rate.

It will make it a narrow window to pop off granny before Labour reverse the changes.

As I recall an all party parliamentary committee (ie including Labour) recommended that the rate be cut substantially and reliefs like BPR abolished or substantially reduced. Absurd that Dyson can buy hundreds of millions of farmland, turn up at a few estate management meetings and then get 100% BPR!

scrumpyjack wrote:

JohnB wrote:If you wanted to reduce the IHT tax take, the best thing would be to restore the allowances squeezed by inflation, simplifying the lives of those dragged across the boundary. But Tories do like taking money from the poor and rewarding the richest, so I suspect a reduction in the 40% rate.

It will make it a narrow window to pop off granny before Labour reverse the changes.

As I recall an all party parliamentary committee (ie including Labour) recommended that the rate be cut substantially and reliefs like BPR abolished or substantially reduced. Absurd that Dyson can buy hundreds of millions of farmland, turn up at a few estate management meetings and then get 100% BPR!

This is the main issue with IHT in my view. It is a grossly unfair tax in that the rich apparently can avoid it.

Nimrod103 wrote:

scrumpyjack wrote:Absurd that Dyson can buy hundreds of millions of farmland, turn up at a few estate management meetings and then get 100% BPR!

This is the main issue with IHT in my view. It is a grossly unfair tax in that the rich apparently can avoid it.

I wonder how far the value of farm land would fall if the CGT exemption were removed?

As a vote winner, I suspect a cut would help turn out the Tory faithful, but it's not really a swing issue I'd have thought, despite a poll quoted on R4 this morning suggesting that an overall majority perceive it as an unfair tax and are in favour of a cut.

V8

88V8 wrote:

Nimrod103 wrote:This is the main issue with IHT in my view. It is a grossly unfair tax in that the rich apparently can avoid it.

I wonder how far the value of farm land would fall if the CGT exemption were removed?

As a vote winner, I suspect a cut would help turn out the Tory faithful, but it's not really a swing issue I'd have thought, despite a poll quoted on R4 this morning suggesting that an overall majority perceive it as an unfair tax and are in favour of a cut.

V8

The main argument in favour of reducing IHT which I have heard recently is that it will be non inflationary, as the money people save will not straight away be spent in the shops.

Of course all the money which was pushed into increasing welfare, benefits and the minimum wage (plus what was saved from furlough) did get spent immediately in the shops and did cause the surge in inflation. Maybe this chancellor and the Treasury has finally realised what is driving higher prices.

Nimrod103 wrote:

88V8 wrote:I wonder how far the value of farm land would fall if the CGT exemption were removed?

As a vote winner, I suspect a cut would help turn out the Tory faithful, but it's not really a swing issue I'd have thought, despite a poll quoted on R4 this morning suggesting that an overall majority perceive it as an unfair tax and are in favour of a cut.

V8

The main argument in favour of reducing IHT which I have heard recently is that it will be non inflationary, as the money people save will not straight away be spent in the shops.

Of course all the money which was pushed into increasing welfare, benefits and the minimum wage (plus what was saved from furlough) did get spent immediately in the shops and did cause the surge in inflation. Maybe this chancellor and the Treasury has finally realised what is driving higher prices.

You're assuming that they are both: 1. honest and 2. not cretinous.

Where's the evidence?

DrFfybes wrote:Quite what the changes will be is not clear, but as there seems a commitment to freeze the £325K personal allowance then either an increase in the rather restrictive and IMO unfair Primary residence allowance, or a reduction or perhaps tapering of the percentage like Stamp Duty.

A simple change would be to get rid of the primary residence allowance and just call the allowance a million for all couples. It is silly that people feel the need to own a property to get the extra allowance.

The rate would have to go down to 20% rather than 30% for me to change my behaviour much. At 10% I probably would not bother jumping through hoops at all to avoid IHT, just as Laffer predicted.

Or abolish it altogether of course.

I'll be gobsmacked if they reduce IHT.

Lootman wrote:

DrFfybes wrote:Quite what the changes will be is not clear, but as there seems a commitment to freeze the £325K personal allowance then either an increase in the rather restrictive and IMO unfair Primary residence allowance, or a reduction or perhaps tapering of the percentage like Stamp Duty.

A simple change would be to get rid of the primary residence allowance and just call the allowance a million for all couples. It is silly that people feel the need to own a property to get the extra allowance.

What an insane idea. Apart from removing in inequity for hose unable to have children, have you any idea how many forms and guidance notes will have to be got rid of in order to enact such an obvious simplification? All those Probate companies going out of business

But, as the £325k limit has been pledged not to change, it is unlikely.

CliffEdge wrote:I'll be gobsmacked if they reduce IHT.

You're not by any chance, an editor of one of the tabloids, are you?

Just that I only ever read words like that in the rubbish press, along with Outraged, Gutted, Stunned, Furious etc.

Not to forget growing concern, resentment, an outcry, and mounting anger?

But most of all, perhaps it's gone viral?

Steve

PS Yes, we're all a bit miffed and even irritated. Even slightly annoyed. Though not enough to loosen my tie.

I've not read the thread. It is pointless.

Parliament is stuffed full of people who claim to be from the legal profession. This means they are experts at plucking geese.....yes you! If you think they are going to change things you are mistaken. If anything I expect it to be made more onerous and more complex.

Why is it countries like NZ do not have IHT or CGT for that matter.....answers on a post card.

I've seen the argument on TV that this is a tax cut for the rich whilst cutting benefits for the poor.

£325k is not a lot if you own a house and have had a lifetime to save something. After all, those unemployed, able but unwilling to work need more help.

I think the word was "could" regarding benefit cuts not definitely.

I don't know how I feel about the tax man robbing my hard earned just because I died. It doesn't feel fair more so as the 3 bed semi darn sarf will likely take you over the limit anyway.

The "real rich" can afford to take measures to avoid so who are the ones being caught out. Teachers, senior nurses, police and doctors. I suppose some here.

I suppose its become a well off tax. I suggest lowing the limits anyway. 40% on everything over £8k. We can have a vote on it. If it doesn't matter cos your dead you don't care what the limit is either.

CliffEdge wrote:I'll be gobsmacked if they reduce IHT.

Well, press reporting that rate is going to be halved to 20%.

Can't see how this will win votes though. The 4% it impacts likely vote Tory anyway.

If there's a tax cut to IHT Wednesday it won't benefit many cause Labour will reverse it as soon as they get in.

Labour keeping very quiet about there tax plans but sure will include high inheritance taxes. Socialists don't believe in inheritance as its unearned by the recipient.

Prediction, once they get in, they'll reverse any tax cuts and will increase taxes massively on the rich. They'll need billions, possibly trillions, to pay for the New Green economy, and build millions of new houses in England for imported voters. Then the super wealthy will leave the UK.