Is it dead good? Friday, October 12, 2007
The planned increase of the IHT allowance by the Chancellor has been damned by many on two fronts - firstly, the cloning of the policy proposals from the Opposition, albeit at a lower threshold; secondly, that married couples can already achieve a tax free estate of £600k since each individual gets £300k allowance.
Yet I think the change has one major benefit - assets need not be distributed on the death of one spouse as is currently the case to benefit from the nil IHT band, nor do many more couples need to make special arrangements.
For example, suppose a couple had an estate of £500k of which a house represented 250k. To benefit from the IHT allowance, either the house had to be given away (sold) or else other assets did, neither of which is palatable scenario since it deprives the surviving spouse of either a home or assets on which to live.
Now, all of the assets can be retained by the surviving spouse if that is the wish of the deceased and transferred at their death.
This may seem an odd topic for this blog - but many of my friends and colleagues all have ageing parents and this is a real topic of discussion for many with their parents.
posted by John Wilson @ 9:24 AM Permanent Link
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1 Comments:
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At 10:12 AM,
Hawkeye said...
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None of this changes that fact that of all forms of legalised theft, sorry, I mean taxes, no, on second thoughts, I do mean legalised theft, Inheritance Tax has to be the most heinous. People spend their lives paying off a mortgage with after tax money and merely by dying have to send the Treasury a share of the 'deemed' profit. Your note on the changes to Capital Gains Tax similarly make my blood boil. People take after tax money and build a thriving business, creating jobs and new tax payers and how are they rewarded? With additional thefts of their capital by the Legalised Thieves department. Makes one want to unilaterally declare independence from some small island somewhere.
