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Abolish inheritance tax in 2021? (82% want to pay less IHT) - YouTube
Channel: Martin Bamford
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should inheritance tax be abolished in
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2021
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i'm reacting in this video to an article
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in the daily express today
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britons feel disgusting tax should be
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abolished as repayments
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soar let's dive in and find out what
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express readers
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really think about inheritance tax
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before i go any further a quick
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introduction if you're new to my videos
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i'm martin bamford a chartered financial
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planner personal finance youtuber and
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money
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author on this channel you're going to
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find videos about personal finance
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investing and happiness if you want to
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become wealthier and happier
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please do click on that little red
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subscribe button to join our subscriber
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community today
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it's completely free and you'll never
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miss an episode i'll pop a link to this
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express article
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in the description helpfully it starts
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off by defining inheritance tax
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they explain that it's a tax payable on
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a person's estate after they have passed
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away
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i was told off once by a client for
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referring to her estate
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and she said to me i don't have an
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estate i have a house which is a fair
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point
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when financial planners talk about
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estate planning we should probably be
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talking about inheritance tax planning
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it's much more accessible language and
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that inheritance tax is paid as the
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express
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says after the person has passed away
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after they've died we can say died right
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those left behind are responsible for
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dealing with the bill well
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yes inheritance taxes the tax paid by
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your children or by your grandchildren
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or by anyone else you leave money and
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other assets behind for
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that feature of the tax can cause a few
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issues
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because what happens when the assets
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left behind are not
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cash but property and inheritance tax
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still needs to be paid in cash
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on the value of that property the kids
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either need to raise the cash to pay
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the tax man by borrowing money from
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their bank or selling the property which
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in many cases
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they want to keep they want to keep that
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property in the family
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the express goes on to explain that
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inheritance tax is levied at 40
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and it's charged above a particular
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threshold that's what we call the nil
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rate band it's currently
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at 325 000 pounds per individual
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just for fun the express has polled its
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readers to find out what they think
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about inheritance tax
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or death duty as it's sometimes called
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apparently
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according to this poll the general
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attitude towards inheritance tax
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appears to be waning they asked readers
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are you happy
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with the current rate of inheritance tax
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what a question
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i guess you're not going to get too many
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people saying yeah i love the thought of
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my kids having to hand
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over 40 of the value of my property to
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hmrc when i pop
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my clogs but out of the 234 people who
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answered this poll
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i don't think 234 is statistically
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significant by the way
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a solid majority thought that the
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current rate of inheritance tax
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was too high 82 of the 234 readers
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who clicked on this online poll
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expressed dissatisfaction
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with the rate of tax and thought it
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should be lowered that does make you
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wonder a bit about the other 18
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are those 42 people happy with the
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current rate of inheritance tax
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maybe they want to pay more the article
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goes on to tell us it goes on to say
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that
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13 of those asked thought that the
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current inheritance tax rate was
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appropriate and then an additional five
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percent thought the tax man should
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charge people
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more for inheritance tax more than that
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current rate of 40 percent
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one express dot co dot uk reader said
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iht
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is an iniquitous tax and his attacks on
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already taxed earnings
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and so should be abolished i'm guessing
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this express reader got a word of the
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day calendar for christmas
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i had to look up iniquitous it means
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grossly unfair and morally wrong
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it's a good word they said the
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government should cut unnecessary
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spending
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before raising taxes another reader said
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probably the most disgusting
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money-grabbing scheme ever invented by
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the government
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pay taxes all your life and then pay tax
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to die
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wow strong strong opinions there why did
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the express get its readers all riled up
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about inheritance tax
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it's a bit of a leap from their usual
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front page fodder of princess diana or
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pensions
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although possibly not that far from
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pensions i guess their survey comes
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after a recent freedom of information
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request
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found out that hm revenue and customs
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made 9864 iht
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repayments in the 2019-2020 tax year
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yes the taxman paid people inheritance
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tax
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back during that last tax year these
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repayments happen for a variety of
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reasons including when assets
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fall in value which of course is one
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consequence of challenging
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economic times like those we're
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currently living
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through the number of repayments in the
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2019-2020 tax year
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was up 66 on the 5949 repayments
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in the previous tax year the express
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refers in its article to a little known
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rule that can mean that refunds on
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losses are available
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which then leads to these inheritance
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tax refunds and when there is market
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turmoil it's reasonable to expect
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more losses and more of these refunds to
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take place
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in an environment where the treasury
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needs to raise more tax revenue
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to pay off its coronavirus debts i think
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it's incredibly unlikely that
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inheritance tax will be reduced
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or even abolished in fact if anything
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the rate of tax
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and the available allowances may go up
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effectively in the future
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but that said former chancellor roy
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jenkins who's a labour chancellor was
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spot
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on when he said inheritance tax is a
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voluntary levy
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paid by those who distrust their heirs
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more than they dislike the inland
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revenue
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and he said that because if you're
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prepared to give money or assets away
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during your lifetime
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with no strings attached and then you go
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on to survive for at least seven years
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afterwards after making that gift
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there is no inheritance tax to pay the
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starting point for any inheritance tax
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planning to make it truly a voluntary
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tax
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is to understand your current liability
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or at least how much your children would
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pay
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in inheritance tax if you died say
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tomorrow with that calculation in hand
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you can then start thinking about
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mitigation techniques
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finding that right balance between
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effectiveness paying less tax
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and continued control being able to
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access your money
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because there is always a balance to be
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struck when it comes to inheritance tax
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planning
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it's very simple to wipe out your entire
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inheritance tax bill
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by giving everything you own away today
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right now just give it away
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but then you lose control over that
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wealth because you've made
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those gifts with no strings attached you
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can't pretend to give money away to your
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children or grandchildren
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for the purpose of inheritance tax
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planning but continue to enjoy its
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benefit that doesn't work the tax man
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takes a very very dim view of that and
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that will actually end up charging your
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children the inheritance tax anyway
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inheritance tax is a reasonably complex
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area of tax planning
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especially if you've got assets
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exceeding that nil rate band
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threshold 325 000 pounds or if you own a
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variety of things like property
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investments businesses etc
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seek professional advice to avoid
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expensive mistakes
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let me repeat that question then from
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the express are you happy
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with the current rate of inheritance tax
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let me know
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in the comments if you found this video
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helpful there's one super quick thing
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press that share button now thank you
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for watching this video
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until next time i'm martin bamford and
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remember when it comes to your money the
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more you know
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the faster it can grow
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