Inheritance tax.

[Deleted member 317777]

IHT seems fair to me. As a married couple we can leave our kids £1 million tax free. If we leave £1.1 million their tax bill would be £40k so they still get &1.06 million

As for passing £10k to each child to CYA the giver should have a simple document confirming the value and date of gift. It’s a sliding scale for IHT on gifts so any sum owing, would quickly get to zero

Why does the government get 40% over 1 million ?

If you think that’s fair, it shows it doesn’t affect you.

 

[Murdochcat]

Google Tapered Annual Allowance.
Tax free allowance is £10k for me.

For super high earners I have no sympathy for your tax bill

 

[Murdochcat]

Why does the government get 40% over 1 million ?

If you think that’s fair, it shows it doesn’t affect you.

Actually it would affect us ……

IHT is charged at 40%

 

[motorbiking]

Tell me how you pay tax on your pension contributions? As I’m not sure I agree with you

is what you asked.

For super high earners I have no sympathy for your tax bill

I merely answered the question.

The bit you are missing is that once a person retires, they are no longer a "super high earner" as you call it.

 

[Murdochcat]

The bit you are missing is that once a person retires, they are no longer a "super high earner" as you call it.

Well, why would you want to add more than £50k per year to your pension once you’ve retired or crystalised your pension

 

[motorbiking]

They are unable to save as much tax free in their pension as the next person. It is that simple. There is a huge difference between saving 10k and 50k.

 

[gas112]

I think they audit 1 in 10. But I suspect they will be looking at those declaring assets around the 750k + mark.

But if I took ten k out my bank gave it to a relative how would they know where that money went. As it happens I gifted over 6 figures about 4 years ago only person informed was solicitor dealing with house sale it was for..

 

[Murdochcat]

They are unable to save as much tax free in their pension as the next person. It is that simple. There is a huge difference between saving 10k and 50k.

You’ve lost me.

Any savings I make now are put on my ISA

 

[motorbiking]

But if I took ten k out my bank gave it to a relative how would they know where that money went. As it happens I gifted over 6 figures about 4 years ago only person informed was solicitor dealing with house sale it was for..

they have access to bank records.

 

[motorbiking]

You’ve lost me.

Any savings I make now are put on my ISA

Person A: is able to save £50k per year tax free in their pension
Person B: is able to save £10k per year

Assuming 3% avg YoY growth. after 20 years. person A has over £1M more in his pot, tax free.

 

[gas112]

they have access to bank records.

Yep so tell me how they would know what I have done with the 10k In cash I have taken out.

 

[motorbiking]

Cash as in Cash? I assumed you meant transferred when you said "took out". Isn't the OP wanting to gift it as inheritance?

 

[pete01]

Cash as in Cash? I assumed you meant transferred when you said "took out". Isn't the OP wanting to gift it as inheritance?

Just a gift, nobody has died yet.

 

[motorbiking]

Can anyone settle this for me?

A friend of mine wants to gift his two kids 10k each, someone has told him they will have to pay tax as the max gift is 3k.

My understanding is that tax will only need to be paid if he was to die within 7 years, and if his estate was worth over £325.000 ( which it isnt)

Thoughts?

The confusion comes with the term "kids".

The maximum you can give a child without tax is the £3k - this is because children don't pay tax on savings and its a way to stop parents avoiding tax by hiding it in their children's accounts.
When it comes to gifts to adult children. it's as per the thread.

 

[motorbiking]

Just a gift, nobody has died yet.

adult kids?