Non spiky Politics 2

May we celebrate a political win on this Thread?

JenniRen 11:39

Absolutely yes!!!!

MaizieD

^It's quite complicated as it can leave those that were gifted money with a tax bill if you don't live for 7 years and they need to understand that.^

That's a risk both the gifter and the gifteee just have to take, isn't it?

Well not entirely, the gifter can add a clause in their will that protects the giftee from being responsible for any tax should the gifter not live for 7 years but that only works if there is money still left in the estate to cover the charge. This is all very close to home ATM as my OH is an executor of a relative's estate which is proving to be full of complications, including this one!

foxie48

It is perfectly legal to give money away as long as you live for 7 years after the gift. however if you die before 7 years the whole amount is (no tapering) is put back into your estate and IHT is assessed first on that. It's quite complicated as it can leave those that were gifted money with a tax bill if you don't live for 7 years and they need to understand that.

The £3,000 annual IHT gift exemption has been in place since 1981. 45 years and no increase at all.

Is that limit something that should be increased?

MaizieD … if people want to leave their heirs something to get them onto the housing ladder, why don't they do it when they are still alive?

Meandrogrog [if] assets are tied up in property, premium bonds, isa etc, so not easy to give whilst still alive.

The Tories are proposing two changes:

First, replacing the £325k and £175k with one simple £500,000 nil rate band – £1m per married couple.

Second, no inheritance tax at all on a main home passed to children or grandchildren, with (it seems) no cap on the value.

(Source Dan Neidle Tax Policy Associates)

taxpolicy.org.uk/2026/10/08/conservatives-inheritance-tax-family-home-cost/

Read the dynamic effects that Neidle describes in his paper.

About 40,000 to 50,000 older owners in England downsize each year, releasing £5bn to £7bn.

This is effectively money that could be or is being used to help their families but … we know that if people die within seven years of making gifts in excess of £3,000 per year then there will be Inheritance Tax to pay.

.. someone who doesn’t downsize at 75 will usually stay put until they die, so the effect builds up. After ten years it could be in the region of 30,000 to 40,000 family-sized homes occupied by people who would otherwise have moved.

In other words, this policy would be a disincentive for people to downsize in order to help their family sooner rather than later as well as increasing the log jam in the housing market.

It's quite complicated as it can leave those that were gifted money with a tax bill if you don't live for 7 years and they need to understand that.

That's a risk both the gifter and the gifteee just have to take, isn't it?

It is perfectly legal to give money away as long as you live for 7 years after the gift. however if you die before 7 years the whole amount is (no tapering) is put back into your estate and IHT is assessed first on that. It's quite complicated as it can leave those that were gifted money with a tax bill if you don't live for 7 years and they need to understand that.

Smileless2012

TBH I'm more impressed with AB than I thought but staggered that he wants to reintroduce alcohol consumption at football matches.

There does appear to be a feeling of hope that was sadly lacking under KS or is that just me .

This is my first time on the Cafe forum and I see this is the second thread for 'Non Spiky Politics'. Great idea and to quote
Arny I'll be back .

They sell alcohol on our football ground! I don’t get what he means. Does he mean you can take your own booze into the grounds? If he does, it’s a daft idea!
No I can’t bare to watch him, I wish they had kept Starmer, might have had a chance of getting them out in the next election.
He wasn’t voted in, his back benchers were all too faced towards KS.
RR ‘oh my friend Andy’ we have been friends for 17 yrs ha, lost her place. Where is she now, back in accounts? 😂

MaizieD

^It does seem, on the surface, very churlish to (re) tax money, which has already probably been taxed at least twice already.^

If you were to follow the progress of, say, £100, through the economy you would find that, unless it were squirreled away somewhere and never saw the light of day, it would be taxed loads of times until it was eventually extinguished. Which is as it should be because the purpose of tax is to extinguish money the state has put into the economy.

And, if people want to leave their heirs something to get them onto the housing ladder, why don't they do it when they are still alive?

I still don't understand why, when IHT allowances 'can' amount to £1million and the heirs also keep 3 fifths of whatever is in excess of £1 million, it is such a hardship.

I thought only a small amount could be gifted annually?

I would imagine that assets are tied up in property, premium bonds, isa etc, so not easy to give whilst still alive, and may be needed as we cannot look into the future to know how much we may need ourselves.

Just a few thoughts.

World War 1 was interesting because of the rise of Communism and the Red Army v White Russians. I think they withdrew after a treaty. Unusual situation and it must have been very difficult to live in those times. Treaty of Brest Litovsk, I actually remember that from history.

Yes, Russia has been defeated on several occasions in the last few hundred years.

More recently, The Crimean War, Russo-Japanese War, WW1 and they withdrew after both the Afghan and first Chechen Wars.

I wonder just how much support Putin gets from other countries like China, North Korea etc. Unfortunately not many have defeated Russia going back through history. I can’t actually think of when they have been defeated but someone here will probably know.

Since Russia is stepping up the attacks on Ukraine I hope all countries in Europe plus the US are increasing the arms to Ukraine in order to show Putin he cannot win this war.

MaizieD

^It does seem, on the surface, very churlish to (re) tax money, which has already probably been taxed at least twice already.^

If you were to follow the progress of, say, £100, through the economy you would find that, unless it were squirreled away somewhere and never saw the light of day, it would be taxed loads of times until it was eventually extinguished. Which is as it should be because the purpose of tax is to extinguish money the state has put into the economy.

And, if people want to leave their heirs something to get them onto the housing ladder, why don't they do it when they are still alive?

I still don't understand why, when IHT allowances 'can' amount to £1million and the heirs also keep 3 fifths of whatever is in excess of £1 million, it is such a hardship.

Put that way, it seems reasonable.

They were both NHS hospital doctors, and saw it all.

neither do I, and neither does my sister, who has a great deal, by virtue of her DH's family money

and will pay every penny of I asked of her

Because she believes that other people need it more.

Simple.

Politics of envy?

Bollueax. Its about those who have more than enough giving to those who have very little but also Human beings needing homes, food, childcare (our future) and maybe a bit for pleasures like days out?

It does seem, on the surface, very churlish to (re) tax money, which has already probably been taxed at least twice already.

If you were to follow the progress of, say, £100, through the economy you would find that, unless it were squirreled away somewhere and never saw the light of day, it would be taxed loads of times until it was eventually extinguished. Which is as it should be because the purpose of tax is to extinguish money the state has put into the economy.

And, if people want to leave their heirs something to get them onto the housing ladder, why don't they do it when they are still alive?

I still don't understand why, when IHT allowances 'can' amount to £1million and the heirs also keep 3 fifths of whatever is in excess of £1 million, it is such a hardship.

Or even other peoples haha

eazybee

The politics of envy.

That’s such a nasty expression, particularly when none of us have zero idea about any of our own financial and personal circumstances.

I have to say IHT has always puzzles me just a bit.

It does seem, on the surface, very churlish to (re) tax money, which has already probably been taxed at least twice already.

Then again, I think I’d be happier if the limits were raised, rather than abolished entirely.

I don't think it's the politics of envy to point out the ramifications that a policy might have on different groups of people. I think politicians are doing that all the time ie How will this affect our core voters? Who will this policy potentially alienate? Will this policy policy appeal to voters who might not like our other policies? etc etc. Political parties spend a lot of time and money on focus groups. Why? Because they want to know how different groups, ages etc will respond to their policies and how, potentially, that might affect who votes for them.

The politics of envy.

foxie. I do think it would discourage people who might otherwise downsize. Neidle estimates the raw number would be comparstively small but it would happen disproportionally nationally adding to the shortage of family-sized homes in London and the South East.

I don’t think a great deal of thought has gone into this promise other than a vain hope it will appeal to what’s left of the dwindling Tory voter base and maybe encourage some who have defected to Reform to come back.

No doubt an idea from Andrew Griffith, the man who was junior Treasury minister under Liz Truss who admitted that its "fatal mistake" then was failing to clearly set out how tax cuts would be paid for. A sense of déjà vu?

Although we can guess how Tories would pay for this little sweetener of giving a tax cut where 90% of it would go to the wealthiest fifth of pensioner households. The poor would pay for it with more austerity.

Neidle sums it up: The Conservatives’ press release says inheritance tax is “bad for growth”. The evidence doesn’t support that.

If gifted a whole load of money then Inheritance Tax would have been paid on it.
Moneys earned by the generous benefactor would also have been taxed.

can anyone give me a rational explanation as to why someone working and earning pays tax, but someone gifted a whole load of money having not got out of bed for it, doesn’t pay a brass farthing?

Could it be that it’s because those savings etc had/have already paid tax on them when originally earned? Yes I get your point that any inherited money (I’ve never had any so just an observation here) just drops into the laps of some lucky people but I dare say back in the day when it belonged to the person who earned it, all relevant deductions were made at that time?