Inheritance Tax

[belton rover]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

[ravenrover]

You have to live 7 years after you give money to children I believe, otherwise it's taxed

[BillyStubbsTears]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

[big fat yorkshire pudding]

Nice little autumn statement tax cut is a start.

[belton rover]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

[danumdon]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

Its not pointless Belton, but it reinforces doubt, if any ever had any!

Contrarians of the world 0 Every bugger else 1

[Bristol Red Rover]

SM, how do you think your kids are not lucky to be able to receive at least all of £500k or £800k of £1m inheritance?

I think the government scrapping these loopholes like trusts, as well as all the off shore pirating is also the way to go.

Simply because luck has played no part in this at all. As a family we made decisions along the way which means I can leave my children something I hope. Even that’s not a given seeing as we have no idea if either one of us should end up in private care which will need funding.

Maybe what we should have done is spend every penny and rely on the state to support us!

It's not too late to spend, or give it away, whatever gives you feel good.

Luck and fortune plays a part in all our lives. For sure it's poss to lead a less risky life, but still. Abuse, robbery, murder, ill health, your industry not being savaged by innovation, changes etc, are all in the lap of the gods. No one is saying you didn't work hard, be astute. But that's no guarantee of material wealth. You have been lucky, many haven't. More to the point, your kids have been lucky having you providing. How much will the relative quality of their lives be affected by having say an extra £100k which is effectively taken from the communities around them?

The politics of envy, not happy for people who have made good life choices but quick to fleece them because they have been "lucky"

Tragic.

The politics of wrong assumptions to justify selfishness.

Cheap.

[drfchound]

Nice little autumn statement tax cut is a start.

The autumn statement must be quite good seeing as no one has been on condemning the government about any of it yet.

[Bristol Red Rover]

SM, how do you think your kids are not lucky to be able to receive at least all of £500k or £800k of £1m inheritance?

I think the government scrapping these loopholes like trusts, as well as all the off shore pirating is also the way to go.

Simply because luck has played no part in this at all. As a family we made decisions along the way which means I can leave my children something I hope. Even that’s not a given seeing as we have no idea if either one of us should end up in private care which will need funding.

Maybe what we should have done is spend every penny and rely on the state to support us!

It's not too late to spend, or give it away, whatever gives you feel good.

Luck and fortune plays a part in all our lives. For sure it's poss to lead a less risky life, but still. Abuse, robbery, murder, ill health, your industry not being savaged by innovation, changes etc, are all in the lap of the gods. No one is saying you didn't work hard, be astute. But that's no guarantee of material wealth. You have been lucky, many haven't. More to the point, your kids have been lucky having you providing. How much will the relative quality of their lives be affected by having say an extra £100k which is effectively taken from the communities around them?

You'll need to explain to me how my kids have taken money from the communities around them if I manage to leave them anything. Are you suggesting that everything I leave behind belongs to the community? Communist nonsense.

Get this through your thick skull, its my money, I earned it, I paid tax on it.

Tax balances out the inequalities inherent in capitalism. Fact.

Leaving your kids money is not something I ever questioned. The amount is. You can leave them 500k tax free. Beyond that a tax is reasonable.

That's not communism, its social positivity.

[BillyStubbsTears]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I'm genuinely stumped by that response.

I gave you an honest answer. There is a major difference  between the two cases. If it's not the answer you want, there's not a lot I can do about that.

[danumdon]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I'm genuinely stumped by that response.

I gave you an honest answer. There is a major difference  between the two cases. If it's not the answer you want, there's not a lot I can do about that.

Its not the answer BST because that's not what he asked.

He asked you to explain the difference between taxed after your dead to not being taxed while still alive.

Its not a difficult question?

[belton rover]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I'm genuinely stumped by that response.

I gave you an honest answer. There is a major difference  between the two cases. If it's not the answer you want, there's not a lot I can do about that.

This whole thread is about inheritance tax, not about whether it is potentially foolish to give large sums of money to my children before my old age.
Not that I have.

[BillyStubbsTears]

Anyway. It's all academic now. No change to IHT, which I applaud.

NIC reduction isn't the worst way to reduce taxes if that's what you choose to do. Although most of that reduction is clawed backas once again Income Tax allowances aren't being raised even though we've had rampant inflation for a couple of years.

The real shocker to come out of the Autumn Statement is in the predictions for growth (next year, down from the previously expected 1.8% to just 0.7%) and inflation & interest rates, both of which are expected to come down much more slowly than previously expected.

This means that by the end of next year, the economy will have grown by only 1% a year since 2016 and only 1.5% a year while the Tories have been in power. For  most of the post-War period until 2010, it was growing at above 2.5% per year.

That is a eye watering difference. It means by the end of this Tory Govt, our economy will be producing something like £350bn less per year than we would if we'd matched previous years. £5000 for every woman, man and child in the country. Lost. Every single year.

It's truly heartbreaking because it was all avoidable. We chose to throw away that future. We aren't the only ones. Germany and much of Europe made the same mistakes. But that doesn't make our failures any less.

[BillyStubbsTears]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I'm genuinely stumped by that response.

I gave you an honest answer. There is a major difference  between the two cases. If it's not the answer you want, there's not a lot I can do about that.

Its not the answer BST because that's not what he asked.

He asked you to explain the difference between taxed after your dead to not being taxed while still alive.

Its not a difficult question?

And I explained why the two cases are different.

[BillyStubbsTears]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I'm genuinely stumped by that response.

I gave you an honest answer. There is a major difference  between the two cases. If it's not the answer you want, there's not a lot I can do about that.

This whole thread is about inheritance tax, not about whether it is potentially foolish to give large sums of money to my children before my old age.
Not that I have.

Then I genuinely don't have a clue what you are talking about.
You asked:
"What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?"

I answered. I explained what the difference is.

[wilts rover]

'A lot of these numbers... are sort of made up' - Paul Johnson, IFS, in his review of the Autumn Statement.

https://twitter.com/SophyRidgeSky/status/1727353906341282050

[belton rover]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I'm genuinely stumped by that response.

I gave you an honest answer. There is a major difference  between the two cases. If it's not the answer you want, there's not a lot I can do about that.

This whole thread is about inheritance tax, not about whether it is potentially foolish to give large sums of money to my children before my old age.
Not that I have.

Then I genuinely don't have a clue what you are talking about.
You asked:
"What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?"

I answered. I explained what the difference is.

As in why one should be taxed and the other not.
As my previous posts made absolutely clear.
You are just being silly.

[BillyStubbsTears]

I'm really not being silly. I honestly thought the point I'm making is obvious.

Giving money as a gift to children well before you die is a Govt-sanctioned means of tax avoidance. But it comes with the risk of you losing control of your money when you might end up needing it. So there's a potential individual advantage, offset by a potential individual risk.

That's the case why pre-death gifts are treated differently than post death inheritances. You asked what the difference was.

Given your responses, I'm wondering if you meant "Do YOU think there should be a difference in how they are treated for tax purposes?" If that's what you meant, my apologies for not reading that into your question. And in that case, my answer would be "no I don't think they should be treated differently." Because, as I've said before, I think the concept of relatively large amounts of money being passed down family lines without being taxed to facilitate a redistribution is not good for society.

Does that clear it up?

[belton rover]

I'm really not being silly. I honestly thought the point I'm making is obvious.

Giving money as a gift to children well before you die is a Govt-sanctioned means of tax avoidance. But it comes with the risk of you losing control of your money when you might end up needing it. So there's a potential individual advantage, offset by a potential individual risk.

That's the case why pre-death gifts are treated differently than post death inheritances. You asked what the difference was.

Given your responses, I'm wondering if you meant "Do YOU think there should be a difference in how they are treated for tax purposes?" If that's what you meant, my apologies for not reading that into your question. And in that case, my answer would be "no I don't think they should be treated differently." Because, as I've said before, I think the concept of relatively large amounts of money being passed down family lines without being taxed to facilitate a redistribution is not good for society.

Does that clear it up?

No
I haven’t done anything to avoid paying tax.
Let’s just leave it unclear and I’ll try to learn from the experience.

[BillyStubbsTears]

Then I'm honestly at a loss as to what question you want me to answer.
 
You asked "What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?"

I've done my level best to explain why I think, for IHT purposes, there IS a difference and also why I think there shouldn't be a difference.

I can't give you any other answer.

[silent majority]

I'm really not being silly. I honestly thought the point I'm making is obvious.

Giving money as a gift to children well before you die is a Govt-sanctioned means of tax avoidance. But it comes with the risk of you losing control of your money when you might end up needing it. So there's a potential individual advantage, offset by a potential individual risk.

That's the case why pre-death gifts are treated differently than post death inheritances. You asked what the difference was.

Given your responses, I'm wondering if you meant "Do YOU think there should be a difference in how they are treated for tax purposes?" If that's what you meant, my apologies for not reading that into your question. And in that case, my answer would be "no I don't think they should be treated differently." Because, as I've said before, I think the concept of relatively large amounts of money being passed down family lines without being taxed to facilitate a redistribution is not good for society.

Does that clear it up?

But BST that is the problem! Why should people be put in such a situation that they have to gamble and hope that their health holds out until they go? Why should it be such a black and white tax which collects very little in terms of the tax take, causes so much anger and does nothing to create the social injustice that you hope it solves? As the country with just about the highest IHT take amongst western democracies and yet we have a country that is constantly overtaxed and none of its social inequalities are dealt with.

Surely letting people like me keep my money, look after myself and my wife into our later years and not have to worry about making ends meet just to avoid a tax which is inherently unfair? That's what a modern and responsible society should be doing. And as pension pots are now being mandatory throughout the workforce more and more people will be faced with this situation as the government rolls back on its duty to take care of its citizens. Were being run by governments without a social conscience.

[silent majority]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I feel for you Belton, I really do.

[wilts rover]

I'm really not being silly. I honestly thought the point I'm making is obvious.

Giving money as a gift to children well before you die is a Govt-sanctioned means of tax avoidance. But it comes with the risk of you losing control of your money when you might end up needing it. So there's a potential individual advantage, offset by a potential individual risk.

That's the case why pre-death gifts are treated differently than post death inheritances. You asked what the difference was.

Given your responses, I'm wondering if you meant "Do YOU think there should be a difference in how they are treated for tax purposes?" If that's what you meant, my apologies for not reading that into your question. And in that case, my answer would be "no I don't think they should be treated differently." Because, as I've said before, I think the concept of relatively large amounts of money being passed down family lines without being taxed to facilitate a redistribution is not good for society.

Does that clear it up?

But BST that is the problem! Why should people be put in such a situation that they have to gamble and hope that their health holds out until they go? Why should it be such a black and white tax which collects very little in terms of the tax take, causes so much anger and does nothing to create the social injustice that you hope it solves? As the country with just about the highest IHT take amongst western democracies and yet we have a country that is constantly overtaxed and none of its social inequalities are dealt with.

Surely letting people like me keep my money, look after myself and my wife into our later years and not have to worry about making ends meet just to avoid a tax which is inherently unfair? That's what a modern and responsible society should be doing. And as pension pots are now being mandatory throughout the workforce more and more people will be faced with this situation as the government rolls back on its duty to take care of its citizens. Were being run by governments without a social conscience.

Your children will not pay Inheritence Tax on the first £325000 of your estate. That's about a third of the total wealth someone on the average wage will have earnt in a life time. It makes you one of the richest 10% in the country.

How much above that do you have that you are worried about them paying tax on?

Plus of course it's your choice. Whether or not, as one of the richest 10% in the country, to pay for your own health requirements in your old age. Or put it to one side for your family when you have gone and let the state/taxpayer pay for your health care.

[wilts rover]

Number of people David Cameron’s Coalition Government took out of paying income tax: 3.2m (Treasury, 2015)

Number of people Sunak's Government brought back into paying income tax: 4 million (OBR, today)

Vote Tory

https://twitter.com/SophyRidgeSky/status/1727396988935655768

[BillyStubbsTears]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I feel for you Belton, I really do.

Is that really necessary?

[BillyStubbsTears]

I'm really not being silly. I honestly thought the point I'm making is obvious.

Giving money as a gift to children well before you die is a Govt-sanctioned means of tax avoidance. But it comes with the risk of you losing control of your money when you might end up needing it. So there's a potential individual advantage, offset by a potential individual risk.

That's the case why pre-death gifts are treated differently than post death inheritances. You asked what the difference was.

Given your responses, I'm wondering if you meant "Do YOU think there should be a difference in how they are treated for tax purposes?" If that's what you meant, my apologies for not reading that into your question. And in that case, my answer would be "no I don't think they should be treated differently." Because, as I've said before, I think the concept of relatively large amounts of money being passed down family lines without being taxed to facilitate a redistribution is not good for society.

Does that clear it up?

But BST that is the problem! Why should people be put in such a situation that they have to gamble and hope that their health holds out until they go? Why should it be such a black and white tax which collects very little in terms of the tax take, causes so much anger and does nothing to create the social injustice that you hope it solves? As the country with just about the highest IHT take amongst western democracies and yet we have a country that is constantly overtaxed and none of its social inequalities are dealt with.

Surely letting people like me keep my money, look after myself and my wife into our later years and not have to worry about making ends meet just to avoid a tax which is inherently unfair? That's what a modern and responsible society should be doing. And as pension pots are now being mandatory throughout the workforce more and more people will be faced with this situation as the government rolls back on its duty to take care of its citizens. Were being run by governments without a social conscience.


[/quote
You may have noted I said I would prefer for gifts during life not to be exempt from IHT. That would eliminate that dilemma.

[danumdon]

Anyway. It's all academic now. No change to IHT, which I applaud.

NIC reduction isn't the worst way to reduce taxes if that's what you choose to do. Although most of that reduction is clawed backas once again Income Tax allowances aren't being raised even though we've had rampant inflation for a couple of years.

The real shocker to come out of the Autumn Statement is in the predictions for growth (next year, down from the previously expected 1.8% to just 0.7%) and inflation & interest rates, both of which are expected to come down much more slowly than previously expected.

This means that by the end of next year, the economy will have grown by only 1% a year since 2016 and only 1.5% a year while the Tories have been in power. For  most of the post-War period until 2010, it was growing at above 2.5% per year.

That is a eye watering difference. It means by the end of this Tory Govt, our economy will be producing something like £350bn less per year than we would if we'd matched previous years. £5000 for every woman, man and child in the country. Lost. Every single year.

It's truly heartbreaking because it was all avoidable. We chose to throw away that future. We aren't the only ones. Germany and much of Europe made the same mistakes. But that doesn't make our failures any less.

BST in this summarisation did you factor in that prior to the period mentioned nobody had to deal with a pandemic, a European war and a global energy crisis?

Your last paragraph does mention that our direct competitors also suffered, does that make their failures any less?

[SydneyRover]

It's all comparative pud

I have zero idea what you mean. What do you think about the tax?

I mean wealth is comparative, relative to what you have and to where you are likely to end up on the ladder You could also look at how poor football clubs manage compared to the premier league, look at IH as helping in a small way to assisting the clubs in the lower leagues.

if you need another example look no further than this recent article below and compare the plight of people described in it to your own.

IT helps level the playing field, assists in social mobility. I support anything that does that.

............. ''Physical and mental wellbeing, community building, life skills; the mothers and babies programme hits a lot of notes. That’s in part because it has to. Doncaster is one of the most impoverished places in England, where a third of children are living in poverty and 41% of residents fall into the bottom 20% of incomes nationwide. Women in Doncaster have the third-worst healthy life expectancy in the country, with an average of 24 years spent living with ill health (for men this figure is 21 years)'' .................

https://www.theguardian.com/football/2023/nov/11/babies-battle-ropes-and-billy-joel-how-doncaster-rovers-reach-out

Bump

what do you think of the tax, pud?

[BillyStubbsTears]

Anyway. It's all academic now. No change to IHT, which I applaud.

NIC reduction isn't the worst way to reduce taxes if that's what you choose to do. Although most of that reduction is clawed backas once again Income Tax allowances aren't being raised even though we've had rampant inflation for a couple of years.

The real shocker to come out of the Autumn Statement is in the predictions for growth (next year, down from the previously expected 1.8% to just 0.7%) and inflation & interest rates, both of which are expected to come down much more slowly than previously expected.

This means that by the end of next year, the economy will have grown by only 1% a year since 2016 and only 1.5% a year while the Tories have been in power. For  most of the post-War period until 2010, it was growing at above 2.5% per year.

That is a eye watering difference. It means by the end of this Tory Govt, our economy will be producing something like £350bn less per year than we would if we'd matched previous years. £5000 for every woman, man and child in the country. Lost. Every single year.

It's truly heartbreaking because it was all avoidable. We chose to throw away that future. We aren't the only ones. Germany and much of Europe made the same mistakes. But that doesn't make our failures any less.

BST in this summarisation did you factor in that prior to the period mentioned nobody had to deal with a pandemic, a European war and a global energy crisis?

Your last paragraph does mention that our direct competitors also suffered, does that make their failures any less?

DD.

We were massively underperforming historic trends from well before any of those issues emerged.

In 2010, we CHOSE to ignore 80 years of understanding of how to get out of serious recessions. Some of us were screaming at the time about the scale of damage that mistake would cause. Personally, I've no pleasure in being proved right on that, but I do wish people like you wouldn't keep trying to find excuses for the failure.

And yes, Germany forced Europe into nearly as bad an outcome. There's no solace in that for anyone.

[drfchound]

I’ll rephrase the question.
What is the difference between me giving my children X amount of money before I die and me giving X amount of money to my children after I die?
Why should one method be taxed and the other one not?

There is a major difference. It's about control and risk.

If you give large amounts of your wealth to your children well before you die, you are taking the risk that you won't yourself have a need for that money before you die, or that, if you do need it, your children give won't give you the rods, or have spent it all themselves.

This is pointless.
I tried.

I feel for you Belton, I really do.

Is that really necessary?

Yes, under the circumstances, I do believe it is a valid statement.