Martin Lewis: Inheritance tax will you pay it? A quick myth-buster to explain how it really works

A quick myth-buster to explain how the much confused tax really works, who’s likely to pay, and who isn’t…

[Erikkurilla]

In the 1990s I sold pensions on the strenght that the tax free lump sum would pay off most if not all of the mortgage and leave the investor with a pension for life. Most were over a 40 year term plus, I was not alone.

[Gopher]

Nowadays I think the bigger concern is losing your estate to care home fees.

[nickjee]

Great video, I have a quick question. I am an aspiring trader, I am looking study some traders and earn off their expertise rather than investing myself and lose money emotionally. What's your take on copy trading? Do people really make money? Just looking for some reassurance.

[Andres_]

Inheritance tax can be a source of confusion, with various myths surrounding who will pay it and how it truly works. Contrary to common belief, not everyone is subject to inheritance tax in every situation

[susanross]

I’m never likely to have enough for inheritance tax to be applied to my estate, but I still think it’s a despicable tax.
We pay tax on everything all our lives, so why should stuff we’ve bought or money we’ve saved, that we’ve already paid tax on, be taxed again on our death.
This was a tax originally aimed at the super rich, now to be honest it affects the moderately wealthy, it shouldn’t be applied to anyone, but if the government must steal money, maybe they could reign it in a bit & only charge 20%.

[wgkhdbl]

That’s the first time I have heard anyone explain the situation about each partner having a double allowance. Thank you.

[rahulammalkaitheri]

Brilliant summary. Anyone asks me about IHT, I’m going to point them to this video.

[papi]

Sounds like a tax on single people to be honest.

[jasmineblack]

Such a brilliant video explaining simply.Been looking on internet & a little confused. the way things were worded.Martyn has summed it up so well.Thank you

[irminakocinska]

The bigger concern is if you need care and own your home the council will take your home, you’ll have nothing to leave. This is what most pensioners like myself are concerned about.

[Eli-rodn]

Ive just had a free chat with advisor Clare Sutherland and she has answered all my questions, especially about lasting power of attorney, IHT, wills and if a trust fund would help. Trust funds can be very expensive. Everyone's situation is different so I think speaking to a professional has helped me understand how I can protect and make it more straight forward for my children to pick up the pieces if I lose capacity and when Ive gone.

[davidunderhill]

At last a clear explanation on inheritance tax! As ever thank you Martin Lewis!

[icjy]

Thank you Martin, that's a very worthwhile and illuminating 4 minutes. Well done.

[Leapops]

Point 6. Whilst only 4% of households pay inheritance tax, many many more have to complete bonkers hrmc forms to prove no tax is due. If you ask a solicitor to do it for you it will cost around £10, 000. If not you get to fill in around 80 pages across 13 forms. It is a bureaucrats wet dream and very time consuming.

[HoneyBumblebee]

People who never saved are better looked after as they can get pension credit and other benefits. People who worked all their lives and saved by being frugal are punished. My pension is very small and every month I have to dip into my meagre savings after working and paying taxes for 45 years. My pension is just over the threshold for claiming pension credit. I am single and there is no one to share the bills. No one knows how long they have got on this planet but my thinking now is enjoy life by spending your savings and if you live long enough without any savings left, then let the government / council take care of you. People with no savings or assets pay nothing for being in a home but others with some assets have to pay.

[chancergordy]

My Mother is going into a care home and the house she and my deceased Dad bought is to be sold off, her savings account emptied and used to pay for her £1200 per week care.
£130, 000 worth at the moment. Sadly, that's how it goes, the money my Mum and Dad created over 60 years is going to the nursing home manager. Someone has to pay for it!
Looks like myself, my brother and sister are getting no inheritance at all. What a wonderful country. 😞😡

[Jessecote]

I lost over $70k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly. Thanks Natalie Strayer.. .

[Ashleycorrie]

I recently inherited almost $500k. I REALLY need to make this money work for me, and not just disappear over time. I've been scrambling for somewhere to put the money, where can make an effort to use the gains to pay bills so I can quit my job. All roads have pointed to the financial market of some sort which is a good idea buh where else should I put money besides the financial market? We have a 13% RPI rate so cash is tough.

[rivierapalms]

Very succinct summary, thanks Martin!

[dpalwh]

The main problem I have with it is that the wealthiest almost entirely avoid it via complex financial vehicles/offshoring etc. Yes, only 4% of estates pay it today, but that number will go up substantially every year as house prices continue to rise and the tax thresholds are frozen.

Taxing twice at 40%, even for affluent households, is imo too heavy a burden, but if you’re going to do it, at least make the very wealthiest pay it as well. Not to do so is a huge injustice.