Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

Proof the housing market has peaked


Recommended Posts

VeryMeanReversion
On 02/05/2021 at 09:00, Wight Flight said:

How would that work?

Say the house was bought for £10k, and was worth £100k at death, would the inheritee have to pay cgt on the £90k and then possibly IT on the net balance?

Doesn't make sense.

No CGT to pay on death.  Death is a very effective tax avoidance measure for CGT purposes.

If there is a gain between the time the inheritee gets it and the time they sell it then CGT is payable on that.  To optimise, fight HMRC for a low valuation for IHT purposes (40%) then make use of Nx CGT allowances. (18-28% but 12.5K allowance per person).

For my Dads place, I used a Deed of Trust to split the post-inheritance gains four ways (two brothers and their spouses). The percentages were then optimised to minimise CGT (most gains in the spouses names since they pay at a lower rate.

That way, we got four CGT allowances (4 * 12.5K = 50K), ensured any capital gains for the 28% CGT tax payers was zero and the remainder was paid by the 18% CGT tax payers.  Reduced a potential ~15K CGT bill to ~5K.  

Legal paperwork for the Deed was £200-300.

 

 

  • Agree 1
  • Informative 6
Link to post
Share on other sites
  • Replies 80
  • Created
  • Last Reply

Top Posters In This Topic

  • Wight Flight

    13

  • sancho panza

    12

  • spygirl

    11

  • moneyscam

    5

Top Posters In This Topic

Popular Posts

No CGT to pay on death.  Death is a very effective tax avoidance measure for CGT purposes. If there is a gain between the time the inheritee gets it and the time they sell it then CGT is payable

A lot of 50 year old's don't have a decent enough pension to pay the bills even if they own a house until they get their state-pension at 67/68. We are entering the age of work till you drop but

Why should they? It is their turn to suck on the taxpayer's teat.

Posted Images

On 02/05/2021 at 22:21, sancho panza said:

IHT allowance is circa £325k iirc.So if the Estate is worth more then it's 40%.

So it could cut both ways but with your average BTLer being 55,owning at least one property plus a BTL,most will have  IHT exposure.

With CGT,as I udnerstand it,resi property is either 18% or 28%.

So any CGT debt would get cancelled .

Having said that,if there's an increase in the valuation at death and the value at sale,CGT is liable on the difference.

Don't forget David Cameron introduced a property allowance of £175K. So for a married couple they can leave £325K+325K+175K+175K= £1M free of IHT to direct descendants.

  • Informative 1
Link to post
Share on other sites
sancho panza
17 hours ago, moneyscam said:

Don't forget David Cameron introduced a property allowance of £175K. So for a married couple they can leave £325K+325K+175K+175K= £1M free of IHT to direct descendants.

I didn't know that.It's been a while since I'd looked.

The £325k from spouse who dies first would have to vest with kids and then be held jointly with surviving spouse.Not impractical in many ways although prone to issues if there are significant family rifts or spouse 2 remarries.I suppose you could insert clauses to cover those.I do know of cases where spouse 1 died,left all to spouse 2 who remarried and died and the kids got nothing.Bad planning on Spouse 1 part.

If spouse 1 dies,leaves their share to spouse 2,then when that share vests with the kids,IHT might be liable if the estate exceeded the £325k+£175k as the IHT allowance can't be rolled to spouse 2.

I honestly didn't know about that £175k.Rather reinforces the imbalance in the good ship Ponzi with even more people stacked on the starboard side.

Absolutely incredible really MS.Thanks for posting.

Edited by sancho panza
  • Agree 1
Link to post
Share on other sites
Green Devil
29 minutes ago, sancho panza said:

I didn't know that.It's been a while since I'd looked.

The £325k from spouse who dies first would have to vest with kids and then be held jointly with surviving spouse.Not impractical in many ways although prone to issues if there are significant family rifts or spouse 2 remarries.I suppose you could insert clauses to cover those.I do know of cases where spouse 1 died,left all to spouse 2 who remarried and died and the kids got nothing.Bad planning on Spouse 1 part.

If spouse 1 dies,leaves their share to spouse 2,then when that share vests with the kids,IHT might be liable if the estate exceeded the £325k+£175k as the IHT allowance can't be rolled to spouse 2.

I honestly didn't know about that £175k.Rather reinforces the imbalance in the good ship Ponzi with even more people stacked on the starboard side.

Absolutely incredible really MS.Thanks for posting.

Usually a couple gives half their share to the two siblimgs. So ownership is then 50%, 25% 25%. Then the survivor can do what they want, the kids get their share. Usually when the survivor dies, that share gets split again. 

The 175k is only on property. So if its worth 325k and the rest is cash say 100k, then its IHT at 40% on tge rest. Fucking robbers. 

Link to post
Share on other sites
Wight Flight
42 minutes ago, sancho panza said:

I honestly didn't know about that £175k.Rather reinforces the imbalance in the good ship Ponzi with even more people stacked on the starboard side.

Yep. It is a massive disincentive to downsize to a smaller property and cash.

Tells you all you need to know really.

  • Agree 1
Link to post
Share on other sites
Hancock
2 hours ago, Wight Flight said:

Yep. It is a massive disincentive to downsize to a smaller property and cash.

Tells you all you need to know really.

We live in a Homocracy! (that i such a thing ive just found out)

So Housocracy.

Edited by Hancock
Link to post
Share on other sites
Lightscribe

https://www.ft.com/content/24a70576-e052-4295-9c92-859c2f7360ad
 

Here’s proof we have peaked...

“When Terri Baxandall went to a seminar about buy-to-let, she had no plans to become a landlord — she only wanted to see Martin Roberts, the entertaining host of BBC 1’s Homes Under the Hammer, who was billed as a speaker.
The TV presenter never turned up. But Baxandall’s interest was piqued — and three years later she owns seven rental properties and counting.

“It’s done really well. They’re in good locations and we rent to people who are going to stay long term.”
The 31-year-old part-time dental nurse moved from Portsmouth to Newark-on- Trent with her husband, a site manager for new-build homes, to put into action
   their plan of buying “doer-upper” homes, refurbishing them and renting them out — even completing two during last year’s pandemic.
She is a prime example of the investor-landlord who sees value in the economic potential of the North: she had no prior connection with Rotherham, but liked its proximity to Sheffield and Doncaster, saw signs of investment and job creation in the town, and the appeal of affordability. None of her purchases has been for more than £100,000; her last was for £55,000. Recently she leased two to a housing association, who rent the homes cheaply to vulnerable adults.
But she has seen prices rise substantially even in the short time she has been in the market. “As an investor it’s harder because you’re leaving a lot more money in it, but money is still better in bricks and mortar than it is in the bank right now.”
Given the ready availability of mortgage finance and a business model that has so far proved its worth, how many homes will be enough for her?
“I don’t want 100 houses,” she says. “I’d rather have 20 or 30 good quality houses with good tenants who call it a home, live there for years and one day they might want to buy it off me at a reduced rate. Or we hand them all to a social housing provider and they can house homeless or vulnerable people.”

  • Agree 1
  • Lol 2
Link to post
Share on other sites
spunko

People like her will always lose their shirt, TPTB will make sure of it. The last thing they want is a part time dental nurse becoming a successful landlord, that is reserved for them only.

Incidentally did anyone see the announcement that the government are "considering" EPC C as a minimum selling requirement after (I think) 2028? I can't find much on it now, overheard it on the radio. That's another way they'll prop things up, make it illegal to sell your home.

 

The pool of available properties available will then be reduced further.

  • Agree 2
Link to post
Share on other sites
Just now, spunko said:

That's another way they'll prop things up, make it illegal to sell your home.

They've already done that with the cladding on flats..........not so much illegal but they are unmortgageable so no-one can sell:(

  • Agree 1
Link to post
Share on other sites
spygirl
On 07/05/2021 at 10:54, Lightscribe said:

https://www.ft.com/content/24a70576-e052-4295-9c92-859c2f7360ad
 

Here’s proof we have peaked...

“When went to a seminar about buy-to-let, she had no plans to become a landlord — she only wanted to see Martin Roberts, the entertaining host of BBC 1’s Homes Under the Hammer, who was billed as a speaker.
The TV presenter never turned up. But Baxandall’s interest was piqued — and three years later she owns seven rental properties and counting.

“It’s done really well. They’re in good locations and we rent to people who are going to stay long term.”
The 31-year-old part-time dental nurse moved from Portsmouth to Newark-on- Trent with her husband, a site manager for new-build homes, to put into action
   their plan of buying “doer-upper” homes, refurbishing them and renting them out — even completing two during last year’s pandemic.
She is a prime example of the investor-landlord who sees value in the economic potential of the North: she had no prior connection with Rotherham, but liked its proximity to Sheffield and Doncaster, saw signs of investment and job creation in the town, and the appeal of affordability. None of her purchases has been for more than £100,000; her last was for £55,000. Recently she leased two to a housing association, who rent the homes cheaply to vulnerable adults.
But she has seen prices rise substantially even in the short time she has been in the market. “As an investor it’s harder because you’re leaving a lot more money in it, but money is still better in bricks and mortar than it is in the bank right now.”
Given the ready availability of mortgage finance and a business model that has so far proved its worth, how many homes will be enough for her?
“I don’t want 100 houses,” she says. “I’d rather have 20 or 30 good quality houses with good tenants who call it a home, live there for years and one day they might want to buy it off me at a reduced rate. Or we hand them all to a social housing provider and they can house homeless or vulnerable people.”

 

20 hours ago, spunko said:

People like her will always lose their shirt, TPTB will make sure of it. The last thing they want is a part time dental nurse becoming a successful landlord, that is reserved for them only.

Incidentally did anyone see the announcement that the government are "considering" EPC C as a minimum selling requirement after (I think) 2028? I can't find much on it now, overheard it on the radio. That's another way they'll prop things up, make it illegal to sell your home.

 

The pool of available properties available will then be reduced further.

Yeah. Read that.

Theres no way she can get the leverage to make that happen.

S24 fucks her up if she was able to borrow IO at high LTV, which she cant.

Entering in slummier end of social rents up North mean's shell get ripped off by the tenants. The idiots who did this mid 00s has lost 30-40k per house in the NE

Just gormless Arsend idiot watching propordee seminars.

https://suite.endole.co.uk/insight/people/26722998-mrs-terri-baxandall

Her company was created Feb 20, just in  time for lockdown n eviction ban.

The other woman mentioned, black one, us just running cans, calling empowering wimmin or blacks.

If she really does have a portfolio of btl in London gen shes fucked as most will be void.

Less TPTB, more you cannot get much leverage these days. Browns gormless credit bubble has gone

 

Link to post
Share on other sites
spygirl
20 hours ago, janch said:

They've already done that with the cladding on flats..........not so much illegal but they are unmortgageable so no-one can sell:(

Unmortgageble at the mo.

By the time tgd cladding us dotted and a cert can be issued they will be unsellable as noone will buy them.

These cladflats are all HTBv2

 

Link to post
Share on other sites
moneyscam
On 06/05/2021 at 15:19, sancho panza said:

I didn't know that.It's been a while since I'd looked.

The £325k from spouse who dies first would have to vest with kids and then be held jointly with surviving spouse.Not impractical in many ways although prone to issues if there are significant family rifts or spouse 2 remarries.I suppose you could insert clauses to cover those.I do know of cases where spouse 1 died,left all to spouse 2 who remarried and died and the kids got nothing.Bad planning on Spouse 1 part.

If spouse 1 dies,leaves their share to spouse 2,then when that share vests with the kids,IHT might be liable if the estate exceeded the £325k+£175k as the IHT allowance can't be rolled to spouse 2.

I honestly didn't know about that £175k.Rather reinforces the imbalance in the good ship Ponzi with even more people stacked on the starboard side.

Absolutely incredible really MS.Thanks for posting.

The bolded bit is not my understanding, the nil rate band of first spouse to die can be transferred to spouse 2 as long as their wills leave everything to each other. Then inheriting direct descendants can inherit up to £1m free of IHT.

More here: https://www.brewin.co.uk/insights/inheritance-tax-do-you-qualify-for-the-new-1m-allowance

 

What is the position now?

When an individual dies, the value of their estate over the nil rate band is liable to IHT at 40% unless it is passed directly to a spouse or registered civil partner. The estate is the value of everything you own including your home.

The nil-rate band threshold means you do not have to pay tax on the first £325,000 of your estate whoever you leave it to. Married couples and registered civil partners can share their thresholds, transferring the unused element of their IHT-free allowance to their living spouse when they die. Doubling up the allowance means a married couple or registered civil partnership can pass on £650,000 tax-free before 40% IHT becomes due.

How will the new allowance work?

As of 6 April 2017 an extra nil-rate band applies when a main residence is passed on to your children or grandchildren.

The main residence allowance will be introduced gradually starting at £100,000 this tax year and rising to £175,000 in April 2020. So, from 2020 a married couple with children will be able to pass on £1m in total - two lots of £325,000 (£650,000) and two lots of £175,000 (£350,000).

Like the standard nil-rate band, the allowance will be transferable to a surviving spouse or registered civil partner. So from 2020 a married couple will be able to pass on assets, including their home, of £1m in total.

Edited by moneyscam
  • Agree 1
  • Informative 1
Link to post
Share on other sites
Green Devil
53 minutes ago, moneyscam said:

The bolded bit is not my understanding, the nil rate band of first spouse to die can be transferred to spouse 2 as long as their wills leave everything to each other. Then inheriting direct descendants can inherit up to £1m free of IHT.

More here: https://www.brewin.co.uk/insights/inheritance-tax-do-you-qualify-for-the-new-1m-allowance

 

What is the position now?

When an individual dies, the value of their estate over the nil rate band is liable to IHT at 40% unless it is passed directly to a spouse or registered civil partner. The estate is the value of everything you own including your home.

The nil-rate band threshold means you do not have to pay tax on the first £325,000 of your estate whoever you leave it to. Married couples and registered civil partners can share their thresholds, transferring the unused element of their IHT-free allowance to their living spouse when they die. Doubling up the allowance means a married couple or registered civil partnership can pass on £650,000 tax-free before 40% IHT becomes due.

How will the new allowance work?

As of 6 April 2017 an extra nil-rate band applies when a main residence is passed on to your children or grandchildren.

The main residence allowance will be introduced gradually starting at £100,000 this tax year and rising to £175,000 in April 2020. So, from 2020 a married couple with children will be able to pass on £1m in total - two lots of £325,000 (£650,000) and two lots of £175,000 (£350,000).

Like the standard nil-rate band, the allowance will be transferable to a surviving spouse or registered civil partner. So from 2020 a married couple will be able to pass on assets, including their home, of £1m in total.

So from 2020 a married couple will be able to pass on assets, including their home, of £1m in total.

Surely this applies just to the home. So if your home is 500k or 1mill youre OK. However, i read this as being JUST your home. If your home is 200k and your investments are 200k, you are taxed at 40% on the balance over 325k, 75k (for a single person).

 

  • Agree 1
  • Informative 1
Link to post
Share on other sites
sancho panza
4 hours ago, moneyscam said:

The bolded bit is not my understanding, the nil rate band of first spouse to die can be transferred to spouse 2 as long as their wills leave everything to each other. Then inheriting direct descendants can inherit up to £1m free of IHT.

More here: https://www.brewin.co.uk/insights/inheritance-tax-do-you-qualify-for-the-new-1m-allowance

 

What is the position now?

When an individual dies, the value of their estate over the nil rate band is liable to IHT at 40% unless it is passed directly to a spouse or registered civil partner. The estate is the value of everything you own including your home.

The nil-rate band threshold means you do not have to pay tax on the first £325,000 of your estate whoever you leave it to. Married couples and registered civil partners can share their thresholds, transferring the unused element of their IHT-free allowance to their living spouse when they die. Doubling up the allowance means a married couple or registered civil partnership can pass on £650,000 tax-free before 40% IHT becomes due.

How will the new allowance work?

As of 6 April 2017 an extra nil-rate band applies when a main residence is passed on to your children or grandchildren.

The main residence allowance will be introduced gradually starting at £100,000 this tax year and rising to £175,000 in April 2020. So, from 2020 a married couple with children will be able to pass on £1m in total - two lots of £325,000 (£650,000) and two lots of £175,000 (£350,000).

Like the standard nil-rate band, the allowance will be transferable to a surviving spouse or registered civil partner. So from 2020 a married couple will be able to pass on assets, including their home, of £1m in total.

Fascinating stuff MS.It's been 15 years since I did a probate.

There are problems with it though from an inheritance point of view.It does encourage spouse 1 to pass on all their estate to spouse 2,adn then spouse 1 is relying on spouse 2 to perform their side of the bargain.This could get very interesting where step parents are involved-although the direct descendants clause would possibly cut their £175k from the tally but that's still £825k tax free.

What surprises me more generally is that they still bother collecting IHT given how little it raises relatively speaking and how many well off people it drives to live elsewhere.

I've jsut had a google and found an interesting OBR linky.4.2% of estates pay IHT.

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/inheritance-tax/

Inheritance tax (IHT) is usually levied on the value of all the assets in an individual’s estate on death, after deducting any liabilities, exemptions and reliefs. Assets left to a spouse or civil partner of the deceased are usually exempt, as are assets left to a charity. In our latest forecast, we expect IHT to raise £5.3 billion in 2019-20. That would represent 0.7  per cent of all receipts and is equivalent to 0.2 per cent of national income. In 2015-16 (the latest year for which information is available), 24,500 estates were liable to inheritance tax – around 4.2 per cent of total UK deaths.

The rate of IHT is normally 40 per cent on the value of an estate above a threshold of £325,000. Any unused threshold may be transferred to a surviving spouse or civil partner, increasing their combined threshold to up to £650,000. This threshold is frozen until 2020-21, after which it increases in line with CPI inflation. Since 2017-18, there has been an additional transferrable main residence nil rate band of £100,000 (rising by £25,000 each year until 2020-21 and by CPI inflation after that) available when a home is left to children or other direct descendants. The rate of IHT is reduced to 36 per cent if 10 per cent or more of the net value of the estate above the threshold is left to charity.

 

  • Informative 1
Link to post
Share on other sites
moneyscam
2 hours ago, Green Devil said:

So from 2020 a married couple will be able to pass on assets, including their home, of £1m in total.

Surely this applies just to the home. So if your home is 500k or 1mill youre OK. However, i read this as being JUST your home. If your home is 200k and your investments are 200k, you are taxed at 40% on the balance over 325k, 75k (for a single person).

 

Having read up a bit more in this your example above would have been correct prior to the introduction of the property allowance. However now a single person can pass on £500K to their spouse free of IHT. It seems according to HMRC the specific value of the property doesn't matter as long as the total estate remains below the total threshold of £500K per person (or £1m per married couple) else I would have expected them to mention it below. And in the case of a married couple passing on assets to children then this allowance doubles hence why the article calls it a 'new £1m allowance'.

For a married couple who don't own a main home but have £800K assets for example it certainly incentivises them to turn at least £350K of this into property in order to mitigate the IHT impact. Previously the estate would have paid 40% of £150K (800-650) i.e £60K, now with a £350K property in the estate there would be nothing payable.

Passing on a home

You can pass a home to your husband, wife or civil partner when you die. There’s no Inheritance Tax to pay if you do this.

If you leave the home to another person in your will, it counts towards the value of the estate.

If you own your home (or a share in it) your tax-free threshold can increase to £500,000 if:

  • you leave it to your children (including adopted, foster or stepchildren) or grandchildren
  • your estate is worth less than £2 million
Link to post
Share on other sites
sancho panza
3 hours ago, Green Devil said:

So from 2020 a married couple will be able to pass on assets, including their home, of £1m in total.

Surely this applies just to the home. So if your home is 500k or 1mill youre OK. However, i read this as being JUST your home. If your home is 200k and your investments are 200k, you are taxed at 40% on the balance over 325k, 75k (for a single person).

 

The £325k would apply to all assets,the £175k solely to property.So if you owned 50% of a hosue worht £50k then you could leave spouse 2 your share of the hosue plus £325k other assets IHT free.

 

I then presume CGT would be liable on any increase in the value of those assets,including the house when spouse 2 dies.

As I've ointed out in a reply to MS,with the amount of second marriages these days,a lot of offspring might rather have the moeny than risk spouse 2 failing.

Link to post
Share on other sites
moneyscam
6 minutes ago, sancho panza said:

Fascinating stuff MS.It's been 15 years since I did a probate.

There are problems with it though from an inheritance point of view.It does encourage spouse 1 to pass on all their estate to spouse 2,adn then spouse 1 is relying on spouse 2 to perform their side of the bargain.This could get very interesting where step parents are involved-although the direct descendants clause would possibly cut their £175k from the tally but that's still £825k tax free.

What surprises me more generally is that they still bother collecting IHT given how little it raises relatively speaking and how many well off people it drives to live elsewhere.

I've jsut had a google and found an interesting OBR linky.4.2% of estates pay IHT.

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/inheritance-tax/

Inheritance tax (IHT) is usually levied on the value of all the assets in an individual’s estate on death, after deducting any liabilities, exemptions and reliefs. Assets left to a spouse or civil partner of the deceased are usually exempt, as are assets left to a charity. In our latest forecast, we expect IHT to raise £5.3 billion in 2019-20. That would represent 0.7  per cent of all receipts and is equivalent to 0.2 per cent of national income. In 2015-16 (the latest year for which information is available), 24,500 estates were liable to inheritance tax – around 4.2 per cent of total UK deaths.

The rate of IHT is normally 40 per cent on the value of an estate above a threshold of £325,000. Any unused threshold may be transferred to a surviving spouse or civil partner, increasing their combined threshold to up to £650,000. This threshold is frozen until 2020-21, after which it increases in line with CPI inflation. Since 2017-18, there has been an additional transferrable main residence nil rate band of £100,000 (rising by £25,000 each year until 2020-21 and by CPI inflation after that) available when a home is left to children or other direct descendants. The rate of IHT is reduced to 36 per cent if 10 per cent or more of the net value of the estate above the threshold is left to charity.

 

Funnily enough I was just reading the same about how little is actually raised. It seems to capture regular people mainly, the seriously rich (at least the ones I've known personally) all use trusts and other vehicles to mitigate against IHT.

You are right that outside of the standard model of happily married only once couple with children only from that marriage things can get more complicated. I was citing the £1m IHT free example for what is still the majority of cases of married couples in this country at least. I'd expect this to change gradually though as divorce and remarriage and children from it has become much more common since at least the 70's.

Link to post
Share on other sites
moneyscam
4 minutes ago, sancho panza said:

The £325k would apply to all assets,the £175k solely to property.So if you owned 50% of a hosue worht £50k then you could leave spouse 2 your share of the hosue plus £325k other assets IHT free.

 

I then presume CGT would be liable on any increase in the value of those assets,including the house when spouse 2 dies.

As I've ointed out in a reply to MS,with the amount of second marriages these days,a lot of offspring might rather have the moeny than risk spouse 2 failing.

 

14 minutes ago, sancho panza said:

The £325k would apply to all assets,the £175k solely to property.So if you owned 50% of a hosue worht £50k then you could leave spouse 2 your share of the hosue plus £325k other assets IHT free.

 

I then presume CGT would be liable on any increase in the value of those assets,including the house when spouse 2 dies.

As I've ointed out in a reply to MS,with the amount of second marriages these days,a lot of offspring might rather have the moeny than risk spouse 2 failing.

No CGT payable on any uplift between spouse 1 and spouse 2 death as this is covered already by the IHT threshold.

However, what you do with the property once inherited does matter and depends on your circumstances. If you don't own a home already and decide to live in inherited property then nothing happens.

If you do own a property already then you have to decide which of your now 2 properties is your main residence. If you sell one of these properties then CGT would be payable upon disposal of it.

If for example you'd owned your main residence 20 years and you want to dispose of one of these properties then your incentive is to dispose of the inherited property fairly quickly.

Tax on property, money and shares you inherit

Skip to contents of guide

Contents

  1. Overview
  2. Money and shares
  3. Property
  4. Joint property, shares and bank accounts

Property

You don’t pay Stamp Duty, Income Tax or Capital Gains Tax on a property you inherit when you inherit it.

You may have to pay Inheritance Tax if the deceased’s estate can’t or doesn’t pay it.

HM Revenue and Customs (HMRC) will contact you if you need to pay.

The rules are different in Scotland.

Selling the property

You don’t pay Capital Gains Tax when you sell your home. You do pay it if you make a profit when you sell a property that isn’t your main home.

If inheriting a property means you own 2 homes, you’ll have to nominate one of them as your main home. You must tell HMRC which property is your main home within 2 years of inheriting the property.

If you don’t tell HMRC and you sell one of the properties, they’ll decide which property was your main home.

  • Informative 1
Link to post
Share on other sites
sancho panza
21 minutes ago, moneyscam said:

Funnily enough I was just reading the same about how little is actually raised. It seems to capture regular people mainly, the seriously rich (at least the ones I've known personally) all use trusts and other vehicles to mitigate against IHT.

You are right that outside of the standard model of happily married only once couple with children only from that marriage things can get more complicated. I was citing the £1m IHT free example for what is still the majority of cases of married couples in this country at least. I'd expect this to change gradually though as divorce and remarriage and children from it has become much more common since at least the 70's.

Based on the 2016 data from the OBR then it suggests even less people will be paying IHT from hereonin.There are still other options such as spouse 1 leaving their share to their kids with a life interest to spouse 2.

AS you say,it will mainly catch those who have a house in London but are income poor and can't afford a second home.

As I remember Ag land is IHT exempt.I could be worng,it was a long time back.

Looking at the way we're talking I suspect they'll can IHT soon.Driving wealthy people out of the UK is bad business and it's ironic that someone who lives on Jersey can own a place in the UK worth millions and not pay IHT on it when they die.

You can move to the Isle of Man/Jersey etc and remove yourself from IHT altogether.

  • Agree 1
Link to post
Share on other sites
sancho panza
40 minutes ago, Wight Flight said:

If you are inheriting more than half a £million, why are people worried about a bit of tax?

If it's split six ways and you're paying 40% tax on everything over £325k then it hits working/middle class people the most.

Also you have to pay the tax before probate issued and you need probate to start selling.

Link to post
Share on other sites
Wight Flight
1 hour ago, sancho panza said:

If it's split six ways and you're paying 40% tax on everything over £325k then it hits working/middle class people the most.

Also you have to pay the tax before probate issued and you need probate to start selling.

Unlikely.

Working class people don't have £1m in assets.

 

  • Lol 1
Link to post
Share on other sites
Green Devil
2 hours ago, sancho panza said:

Based on the 2016 data from the OBR then it suggests even less people will be paying IHT from hereonin.There are still other options such as spouse 1 leaving their share to their kids with a life interest to spouse 2.

AS you say,it will mainly catch those who have a house in London but are income poor and can't afford a second home.

As I remember Ag land is IHT exempt.I could be worng,it was a long time back.

Looking at the way we're talking I suspect they'll can IHT soon.Driving wealthy people out of the UK is bad business and it's ironic that someone who lives on Jersey can own a place in the UK worth millions and not pay IHT on it when they die.

You can move to the Isle of Man/Jersey etc and remove yourself from IHT altogether.

The uk should do itself a favour. 

Get rid of iht altogether, and remove CGT on everything except 2nd homes or BTLs (they could double it on that). 

Link to post
Share on other sites
sancho panza
1 hour ago, Wight Flight said:

Unlikely.

Working class people don't have £1m in assets.

 

Not as unlikely as you think in the south.Shitty terrace in Londinium bought for peanuts in 70's now worth a????.

Split 6 ways =£166k.

If you pay 40% tax on everything over £325k then =£118k each.That's a lot of money for msot people right there.

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    No registered users viewing this page.


×
×
  • Create New...