Death and money and wills and such matters

[pcg79]

My mum seems to think the government take 40% of your estate when you die even if its on a will and stuff.

This cant be right.

Tell me it isnt (but only IF it isnt).

 

[Summo]

It's 60%. They take 40% of your body's water content.

 

[Xtro]

AFAIK Death Duty is 42%.

 

[Embattle]

Its funny though, because even in death you don't truely escape tax

 

[pcg79]

i wish i knew if you lot were serious or not

 

[Embattle]

http://news.bbc.co.uk/1/hi/business/3169611.stm

Oh BTW yes its a BBC link.

 

[xane]

It's only above £225,000 that tax is imposed.

Also, if you are joint owners of a house then that is not included in the amount, i.e. it is not considered part of the estate, so this only really mainly applies to children inheriting their parents property.

there has been a steady upward creep in the number of estates caught by inheritance tax, from 19,000 in 1998 to 29,500 in 2003 - a 55% rise.

A bit of a number fudge that, consider in other terms of the amount of people who die yearly and less than 30,000 actually pay the tax.

The comments on the BBC article describe a better picture. Bear in mind that an average income yields around £1.25 to £1.5 million during an entire lifetime, so having a £250,000 lump sum is certainly putting you in the "well off" bracket.

 

[Tom]

Originally posted by pcg79
My mum seems to think the government take 40% of your estate when you die even if its on a will and stuff.

This cant be right.

Tell me it isnt (but only IF it isnt).

So basically, you're thinking of bumping off your mum?

 

[Rubber Bullets]

Death Duty is an appaling tax.

My brother-in-law is a farmer, in Scotland, and is barely able to scrape a living from the farm at the moment. When his father died, and left him the farm, the death duty was such that they had to sell part of it in order to pay the tax, thus reducing his potential earnings even further.

How can this be right? You work all your life to provide a nice little nest-egg for your kids, paying taxes all the way, and if you are really succesful at it the fucking government take nearly half of it away .

RB

 

[Tom]

Originally posted by Rubber Bullets
Death Duty is an appaling tax.

My brother-in-law is a farmer, in Scotland, and is barely able to scrape a living from the farm at the moment. When his father died, and left him the farm, the death duty was such that they had to sell part of it in order to pay the tax, thus reducing his potential earnings even further.

How can this be right? You work all your life to provide a nice little nest-egg for your kids, paying taxes all the way, and if you are really succesful at it the fucking government take nearly half of it away .

RB

Too many small farms in this country tbh. Thats the bitter truth pill that the government is too frightened to ask us to swallow.

If you don't want to pay death duty, get your parents to sell their house to you at a mega cheap rate.

 

[GDW]

It mustnt have been a working farm in recent years.

There is 100% tax relief on all agricultural property, plant and machinery and bloodstock and has been for years.

So speaketh a boring accountant

 

[GDW]

Pcg79, basically your mum shouldnt have anything to worry about if the total value of her estate on death is less than the current 225k limit and she hasnt been given a load of lifetime transfers from others in the last 7 years.

 

[Mr.Monkey]

Ahh inhertance tax , my fav.

A quick check of a great book (hardmans), lets us know that you will not suffer IHT if you transfer less than £250,000 in 02/03 (GDW is thinking of 01/02 where it was £242k).
And the tax rate above that is 40%.

Gifts made before death in the 7 years prior to death are included in the calculation for tax (tapered depending on how long ago it was).
The due date for death tax is six months after the end ofthe month the death occured.

There are lots of exemptions for Agriculture and sole traders, and some controling share holders. But if you are a farmer or a "proper" business man, what are you doing here?

Now go butcher your mother for the inheritance. Buy a shiny new 3Ghz computer. Get me one two. Please.

 

[kameleon]

Originally posted by Rubber Bullets
Death Duty is an appaling tax.

My brother-in-law is a farmer, in Scotland, and is barely able to scrape a living from the farm at the moment. When his father died, and left him the farm, the death duty was such that they had to sell part of it in order to pay the tax, thus reducing his potential earnings even further.

How can this be right? You work all your life to provide a nice little nest-egg for your kids, paying taxes all the way, and if you are really succesful at it the fucking government take nearly half of it away .

RB

Welcome to the real world.

There is an old saying, "there are only two certainties in life - death and taxes"

 

[pcg79]

WTF ! I cant believe you need to pay for shit after youve died. is it just me or does it seem morally wrong somehow ?!

oh and the house is worth 250-300k.

 

[xane]

Originally posted by pcg79
oh and the house is worth 250-300k.

Sorry, maybe I am missing something here, but £250,000 is about 10 years of an average salary, and you are proposing people should receive it tax free ?

 

[1tchy trigger]

The whole inheritance tax thang is designed to stop the really rich from just getting richer and richer i.e. holding on to their wealth throughout many generations.

Unfortunately like most Govt taxes it hits those in between 'rich-poor' much harder than anyone else.

TBH it does suck the big one.

 

[Mr.Monkey]

Death duty can be avoided (to a greater of lesser extent) by careful planning.

Give away your assets to your kids 7 years before you die.
Put you grandkids in the will to skip a generation of tax.


Or don't die.

 

[Testin da Cable]

I'd prefer not to die tbh

 

[pcg79]

Originally posted by xane
Sorry, maybe I am missing something here, but £250,000 is about 10 years of an average salary, and you are proposing people should receive it tax free ?

wouldnt you want your children to have what you worked for ?

 

[dysfunction]

Originally posted by Testin da Cable
I'd prefer not to die tbh

I dont think you'll be saying that if you reach 90, smell of wee , bruise for no reason, have brittle bones, can hardly walk, can hardly feed yourself...

 

[Mr.Monkey]

Originally posted by dysfunction
smell of wee , bruise for no reason, have brittle bones, can hardly walk, can hardly feed yourself...

Actually it's not all that bad.

Jehovas witnesses don't bother me anymore.

 

[Rubber Bullets]

Originally posted by GDW
It mustnt have been a working farm in recent years.

There is 100% tax relief on all agricultural property, plant and machinery and bloodstock and has been for years.

So speaketh a boring accountant

Is this also the case in Scotland?

It certainly was/is a working farm, though theres precious little to be earned at the moment.

Perhaps I got my info wrong, I'll have to check.

Though this does suggest a way round inheritance tax is to sell all your houses and investments and buy a farm

BTW Kameleon, I am in the real world, I just don't have to like it. I am not against taxation in general, there is no other way to pay to keep the country going, but I think that this particular tax is an unpleasant and unfair one.

RB

 

[kanonfodda]

Originally posted by xane
Sorry, maybe I am missing something here, but £250,000 is about 10 years of an average salary, and you are proposing people should receive it tax free ?

Surely if you have earned the money, you already payed tax on it? Although I can also see the other side, IE: stopping the stoopidly rich getting richer.

Of course, by the time they die, they have already transferred all their money to off-shoure accounts, doling out £200k at a time, to avoid tax :S (is that too cynical?)

 

[Mr.Monkey]

Off-shore accounts don't actually reduce your tax liability, if you are a UK resident.
As a Resident or an Ordinary Resident, you suffer tax on all your worldwide income (so interest on your offshore account), and it is covered by inheritance tax.
If you fail to disclose that you have an offshore account, this is tax evasion, and is illegal.

Offshore accounts are usually used as they often offer higher growth rates than UK a/c, but you have to invest a minimum, that us around the 100k mark.
(that's not to say no tax evasion ever goes on).

The issue is, that most of the "rich" people are landed, and have to sell of significant chunks of land in order to pay the inheritance tax. Cashflow is king baby.