Hundreds of readers took to Express.co.uk yesterday to vent their anger and disbelief after a woman called LBC radio to complain that she was left with a £1.4million HM Revenue and Customs (HMRC) tax bill following her parents’ death. The caller was close to tears as she described how her parents ‘worked hard all their lives’ but were taxed twice – once on their income and another when they passed away.
Yesterday, a woman called LBC Radio close to tears and told the presenter that she had been landed with a £1.4million tax bill after her parents died.
Speaking to Rachel Reeves she 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.”
To add insult to injury, the woman told listeners how she didn’t receive any support from the Government during the COVID-19 pandemic.
One reader looloo1955 commented: “This is why you should downsize and spend the money.
“My mum is paying £20 short of £5,000 per month for a care home.
“Nearly all the money she got for her house is now gone, but at least the tax man is not getting any when she finally passes away.”
Another Express.co.uk reader Zidznot said: “The parents haven’t only been taxed twice, they’ve been taxed many, many times over and over again.
“This is a DEATH tax that is paid for by the ‘little’ people and 100 percent avoided by all those with money because they can pay for the financial advisers with tax avoidance schemes.”
However some readers were less sympathetic.
Van-hato said: “How much was the estate worth to pay £1.4 million? Around £3.5million.
“If you have that much money why aren’t you getting proper advice?”
The caller admitted yesterday that her parents could have paid a lot less if they’d made use of loopholes.
Generally there are 10 ways people can legally pay less inheritance tax including:
- 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.