Why the California is a third of the price for pensioners

[GregW]

Think your maths is a bit dodgy Tom. The California is still part of the estate and if the estate was still over 450k (900k for a couple) then some inheritance tax would still be due. And looking at some of the valuations on here it's unlikely to have depreciated much. Only if the cali is worth £0 at that point would it have cost them only 36k. So they might as well get the enjoyment while they can. The taxman is coming after his share after all he's got to find the money for hs2 from somewhere so you 'in that there London' can get to Birmingham 20 minutes quicker

Isn't the inheritance tax threshold £325 for a single or £650 for a couple, plus £100k for a transferred property making a potential of £750k rather than £450/£900?


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[GregW]

Because typically one spouse dies before the other, and the first transfer of the property (into the hands of the surviving spouse) is not a taxable event.

It is the second transfer, from the sole spouse to the family that attracts the tax, but there is only one property allowance available at that point of £100k.


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[Amarillo]

It is the second transfer, from the sole spouse to the family that attracts the tax, but there is only one property allowance available at that point of £100k.

I may have misunderstood, but I think that since 5 April 2018 the main residence allowance is £125,00, and transferable from one spouse to the other. This gives a IHT allowance of £325,000 + £125,000 + £325,000 + £125,000 on a main residence passed by two parents to direct descendants or adopted descendants only. I'm unsure of the rules for those with three or more parents: biological, adoptive, surrogate, egg donor, etc.



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[GregW]

I may have misunderstood, but I think that since 5 April 2018 the main residence allowance is £125,00, and transferable from one spouse to the other. This gives a IHT allowance of £325,000 + £125,000 + £325,000 + £125,000 on a main residence passed to direct descendants or adopted descendants only. I'm unsure of the rules for those with three or more parents: biological, adoptive, surrogate, egg donor, etc.



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You are correct in that it increased by £25k each year until 2020, and it is £125k this year, but it doesn't get doubled up to £250k


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[Amarillo]

You are correct in that it increased by £25k each year until 2020, and it is £125k this year, but it doesn't get doubled up to £250k


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Where does the govt. promise of descendants inheriting a £1 million property tax free by 2020 come from?


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[GregW]

Where does the govt. promise of descendants inheriting a £1 million property tax free by 2020 come from?


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My error. You are indeed correct. So long as it hasn't been used the additional unused threshold does transfer on death if the property is left to direct descendants.


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[Velma's Dad]

While no taxes are ever likely to be popular, I think it's a pity there's such a visceral dislike for IHT.

Unlike lifetime taxes, which are mainly on earned income, the bulk of IHT collected every year represents a partial claw-back of some of the massive growth in property wealth growth over the past half-century. Nearly all that growth was not 'earned' by homeowners, it was a jackpot prize to the Baby Boomers (like me) for having been in a lucky position to sit and watch our house values go up, year after year, way above wage rates. And actually, by electing successive governments which we relied on to stoke up those values by throttling private and public housebuilding.

The Millennials, as a generation (not all of whom have parents who can leave them 65% of a million pound house), might well feel they have every right to the nation reclaiming some of that Boomer windfall.

And don't get me started on the unwillingness of us Boomers to countenance contributing even a portion of our unearned property loot to covering the costs of looking after us when we're gaga

Okay it's nothing to do with Calis, but I'm just sayin'...

 

[Digger]

If Amazon and other large corporations paid a true rate of tax we would not object to fair taxation. Seems the little man and especially the motorist is the fall guy.

 

[soulstyledevon]

If Amazon and other large corporations paid a true rate of tax we would not object to fair taxation. Seems the little man and especially the motorist is the fall guy.

Don’t get me started on Amazon.
I have nothing but pure hatred for this company. Having read how they treat their work force and seeing their head honcho raking in a massive £1.6m per hour. I find it appalling the wealth isn’t better distributed to those that work hard within the company.

I am guilty of falling for the Amazon trap. But this year decided to start shopping local and supporting my home town businesses. It’s not always cheaper at Amazon and I’ve even had a good Will gesture on a gas bottle for the Cali. My local shop gave me the bottle for free providing it gets topped up back at the store.
Absolutely brilliant service and the start of putting back into my local community.

 

[Velma's Dad]

Don’t get me started on Amazon.
I have nothing but pure hatred for this company. Having read how they treat their work force and seeing their head honcho raking in a massive £1.6m per hour. I find it appalling the wealth isn’t better distributed to those that work hard within the company.

I am guilty of falling for the Amazon trap. But this year decided to start shopping local and supporting my home town businesses. It’s not always cheaper at Amazon and I’ve even had a good Will gesture on a gas bottle for the Cali. My local shop gave me the bottle for free providing it gets topped up back at the store.
Absolutely brilliant service and the start of putting back into my local community.

Good for you. Amazon still too easy for us but I really ought to try to shop around more, including locally.

Unfortunately I think it's going to be really hard to get the new wave of multinationals to pay their 'fair share' of taxes. With digital businesses especially, it's just really hard to nail down where their taxable profits fall. Corporation tax is now only about 8% of UK's total tax receipts. In future I think governments will have to switch to less avoidable/evadeable tax types such as taxes on investor returns, sales, etc.

 

[Amarillo]

"The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing."
Jean-Baptiste Colbert - French Minister of Finances 1665 to 1683

After the final deep exhale, the dead do not hiss.


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[Amarillo]

If Amazon and other large corporations paid a true rate of tax we would not object to fair taxation. Seems the little man and especially the motorist is the fall guy.

Blaming Amazon for British taxation policy is a little like blaming the EU for British non-EU immigration policy. It is not Amazon's fault that taxation policy is what it is. Blame the Govt., Parliament or the Electorate instead.


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[Jonathan Duke]

As a fan and follower of Banksy..... This thread made me think of his latest statement:

 

[Bellcrew]

"The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing."
Jean-Baptiste Colbert - French Minister of Finances 1665 to 1683

After the final deep exhale, the dead do not hiss.


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But their children will be really angry (hiss?) if the government confiscates their inheritance and hands it to its new favourite deserving poor.

 

[Digger]

Blaming Amazon for British taxation policy is a little like blaming the EU for British non-EU immigration policy. It is not Amazon's fault that taxation policy is what it is. Blame the Govt., Parliament or the Electorate instead.


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Never mentioned blame. Pointed out facts that large corporations use accountants and feeble governments to avoid taxation. Junker was one of those complicit when in government.

 

[GregW]

Sod the kids, I’m going SKIing (Spending the Kids Inheritance)

Millennials expect instant rewards with zero effort. Jam today. Tough luck.


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[soulstyledevon]

Blaming Amazon for British taxation policy is a little like blaming the EU for British non-EU immigration policy. It is not Amazon's fault that taxation policy is what it is. Blame the Govt., Parliament or the Electorate instead.


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Agree, the government/governments need to stand firm against the tyranny that is companies like Amazon.

However you can make a stand as an individual. Stop being a lazy, bugger. Log off, walk to your nearest high street and re-invest your money back into the community that you live.
Talk to the cashier, communicate, absorb, live, make a difference and help bring shop fronts and vibrancy back to where you live.

Im guilty of being a lazy Amazon junky too. But I’ve seen the light.
I’m just hoping others will follow

 

[GregW]

Agree, the government/governments need to stand firm against the tyranny that is companies like Amazon.

However you can make a stand as an individual. Stop being a lazy, bugger. Log off, walk to your nearest high street and re-invest your money back into the community that you live.
Talk to the cashier, communicate, absorb, live, make a difference and help bring shop fronts and vibrancy back to where you live.

Im guilty of being a lazy Amazon junky too. But I’ve seen the light.
I’m just hoping others will follow

The world has changed. It’s not going back to small corner shops and personal service no matter what you hope. Amazon won’t be humbled by people-power because it taps directly into how people want to live today.

Proper corporate taxation is the job of government, and they need to do a far better job of ensuring Amazon pay tax and we don’t end up with a monopoly.


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[motacyclist]

But their children will be really angry (hiss?) if the government confiscates their inheritance and hands it to its new favourite deserving poor.

Yes, and hurry up and kick the bucket in time for the next release of the latest iPhone and Premier League BT/Sky subscription hand outs.

 

[Amarillo]

But their children will be really angry (hiss?) if the government confiscates their inheritance and hands it to its new favourite deserving poor.

It is not unheard of for a wealthy grandparent to gift a newborn child great untaxed wealth on birth (both my sons received a cash gift from grandparents on birth). How is one newborn more worthy of untaxed gifts than another?


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[Amarillo]

I believe it's still possible to put your house into a trust for your offspring and carry on living in it. I might be talking total rubbish here but unless things have changed, providing you both continue to live for another seven years after setting up the trust, the HMRC can't include the property when calculating the IHT liabilty. However, I'm also pretty sure you would need to be mortgage free to do this.

==========
“If at the time you may need local authority assistance with your care fees you do not own a property, because it is held in trust, it should be protected unless the local authority were to decide that you had deliberately deprived yourself of the property in order to get help with the fees.

“When you apply for assistance you will be asked if you have ever owned a home and if you no longer own it what happened to it.”
==========
From https://www.telegraph.co.uk/money/ask-a-money-expert/can-put-home-trust-dodge-care-costs/

 

[MarkVw2017]

I am guilty of falling for the Amazon trap. But this year decided to start shopping local and supporting my home town businesses. .

As a small business person myself, that is wonderful to hear! The money you spend with small businesses, goes right back into the local community! We dont have shareholders throughout the world, or directors with million £ bonueses, we dont have computers answering your calls, we dont put you on hold, we actually really do care about our customers! I personally just have a couple of kids to look after and standard bills to pay and of course, where possible, i also spend the money i make with small business even if it costs me a few more £!!! The real bullies are the energy companies, buying from amazon is an option, but we ALL need gas and electric! And dont get me started on Welsh Water "a non for profit organisation" where the director earned £768k plus 2 bonuses. No wonder its non profitable! What a Joke!!!! Sorry, rant over!!!!!

 

[T6 CFO]

As a small business person myself, that is wonderful to hear! The money you spend with small businesses, goes right back into the local community! We dont have shareholders throughout the world, or directors with million £ bonueses, we dont have computers answering your calls, we dont put you on hold, we actually really do care about our customers! I personally just have a couple of kids to look after and standard bills to pay and of course, where possible, i also spend the money i make with small business even if it costs me a few more £!!! The real bullies are the energy companies, buying from amazon is an option, but we ALL need gas and electric! And dont get me started on Welsh Water "a non for profit organisation" where the director earned £768k plus 2 bonuses. No wonder its non profitable! What a Joke!!!! Sorry, rant over!!!!!

Slowly weening myself off Amazon but as above they need to sort it out as the world has changed.

Non profit often means directors get massive pay and bonuses. There’s a housing charity round here who are non profit. I had a look at the directors pay. Shocking. Shame is that as soon as I see the words charity or non profit my alarm bells ring.

Also shocking is the way these threads go off topic


Mike

 

[Bellcrew]

It is not unheard of for a wealthy grandparent to gift a newborn child great untaxed wealth on birth (both my sons received a cash gift from grandparents on birth). How is one newborn more worthy of untaxed gifts than another?


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Whilst I normally enjoy the badinage of this slightly controversial stuff on the Guardian blogs this is probably not the place.

 

[Borris]

While no taxes are ever likely

==========
“If at the time you may need local authority assistance with your care fees you do not own a property, because it is held in trust, it should be protected unless the local authority were to decide that you had deliberately deprived yourself of the property in order to get help with the fees.

“When you apply for assistance you will be asked if you have ever owned a home and if you no longer own it what happened to it.”
==========
From https://www.telegraph.co.uk/money/ask-a-money-expert/can-put-home-trust-dodge-care-costs/

Well as I've said you'd need to speak to a legal expert however I believe it is still possible for some and the LA can't touch it.

(Ts and Cs apply)