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Death Duties

Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
If one married partner of an elderly couple dies, am I right in thinking no taxes or death duties are paid until the second partner passes away? Or is the estate taxed twice? Anyone know?

Comments

  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    If they are married and the house is jointly owned by the 2 of them then it's definitely not taxed until the other one dies.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    I cant beleive a goverments allowed to tax dead relatives!

    It's absoloutley scandolous!
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    The inheritance tax threshold is £275,000, which means only the part of the estate over that limit is taxed. The estate comprises of things like the property, or savings, after any debts and other liabilities have been paid back.

    Married couples (and this includes civil partners) are not taxed when they die and the full estate is passed to their spouse, but when the second spouse dies the estate is taxed.

    I really don't see the problem with inheritance tax, as most people even now do not have an estate worth over that amount. And if they do, the estate is wealthy enough to contribute something to society.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Kermit wrote: »
    I really don't see the problem with inheritance tax, as most people even now do not have an estate worth over that amount. And if they do, the estate is wealthy enough to contribute something to society.

    Huge swathes of London are easily in this bracket purely because of the house they live in, even if they aren't that wealthy otherwise.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    But that's not the point I was making. Even if the person dies penniless except for their house, the estate is wealthy enough to pay the tax.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    The estate might be in the sense of the sale of the house would make paying tax possible, but that being the only way to do it can cause huge problems, and upset.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    It usually doesn't though, because most people already have a house of their own, and sell the deceased person's house.

    I think the threshold might be about £50k too low, but there's nothing wrong with the idea of inheritance tax.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Yup, but with the way the probate laws currently work, if the only way you can pay the tax is through the house sale, then you get stuck until you manage to sell the house and end up taking loans out to cover the costs to fill the gap.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    The tax comes out of the estate, it isn't the responsibility of the beneficiaries to pay the tax. The tax remains the liability of the estate.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    My only issue with inheritance tax would be if I wanted to live in the house (eg if I was renting and didn't have another house to sell), but couldn't because I wouldn't be able to pay the tax on it. I do think the boundary is a bit low at the moment though, as house prices have risen a lot faster than the boundary has.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Yup, but the estate is frozen until the tax is paid, wherein can often lie a problem.

    I don't have a problem with the tax necessarily, more in the way it's administered.
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