A woman slapped with a seven-figure tax inheritance bill after her parents passed away was left close to tears as she questioned why people were being taxed twice.
The caller described how her parents "worked hard all their lives" but were effectively hit with a double charge after a £1.4 million bill arrived on her doorstep.
Speaking on LBC radio earlier today she argued that her parents had already paid income tax and taxes when they bought their home, so why was she left with such a huge bill?
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Speaking to Rachel Reeves on LBC earlier today, the caller said: “My feeling is that taxes are there to make life easier for everybody.
“My parents worked the whole of their lives - they paid taxes on their income on their home buying.
“I lost them both within the last five years and I got a tax bill from HMRC for £1.4million dropped through my door in a brown envelope.
“No warning, no nothing.”
“I didn’t use a loophole - my parents didn’t use a loophole - and I paid it all.
“All of it by selling my family home.
“Then during lockdown I got absolutely no support from the Government.
“So how is that a tax system that supports a hardworking person?”
Commonly referred to as “death taxes” inheritance tax is one of Britons’ most hated taxes, the Daily Express reports.
Many people think it's unfair as people pay taxes throughout their lives only to be charged again when they die.
And, as property prices continue to rise, experts fear that thousands more Britons could be caught out.
Liz Ritchie, partner at tax and advisory firm Mazars said: “We can expect to see this soar further in the coming years as thousands more homeowners are dragged into paying tax on their estates."
The caller said her parents didn’t make use of any loopholes, but there are some key things people can do to pay less IHT.
Married couples and civil partners can double their allowance to £650,000 by passing on their property to each other when one dies.
People could also set up a trust to reduce how much IHT someone has to pay.
Gifting is also considered to be one of the best ways to reduce IHT as it can help mitigate tax as well as passing wealth on to loved ones.
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10 ways people could pay less inheritance tax:
- Talk to parents or grandparents about putting the property into trust
- Make sure they know about Business Owner Exemptions
- Donate a part of it (above the threshold) to charity
- Gift up to £3,000 to family members and friends tax free
- Give away assets seven years before they die? Encourage them to spend it well before they die
- Make the most of wedding gift allowances (up to £5,000)
- Buy a funeral plan
- Spend it
- Be mindful of inheritance tax thresholds
- Speak to an independent financial adviser.
