Conspiracy Theory OAP

Yes, they've now allowed the surviving spouse to claim both allowances but, the way the property values are going up around here (and they don't increase the allowance) the executors will have to sell the property to pay the tax! The tax is 40% on everything above the allowance.

Sounds reasonable - as long as you know in advance when you're going to die . The old trick of giving the house to the kids and letting you stay in it until you die is not allowed any more for I.T. purposes - unless you pay market rent.

 

It gets rather complicated as, if you gifted it before death then there may be a liability for CGT but there are things like 'hold-over' relief as well. Indexation Allowance and Taper Relief were abolished in 2008 - I think!

 

I think we all agree with you, wholeheartedly

You can do that if you don't come within the Inheritance Tax bracket. Unfortunately, because of soaring house prices in the South, more and more people are falling foul of it.

If your house brings you into the Inheritance Tax bracket simply because of where you live, it has other effects as well. When you die, your son will also have to pay Inheritance Tax (40%) on all your assets - your car, furniture, TV, computers, jewellery etc. It will be valued at secondhand value (which may only be a little) but it will have some value.

Although this isn't what Jack was talking about it's the same principle. If you've saved, paid tax and got some assets the B****ers will get you!!!

 

I have to agree with Scrungee there

We could downsize a bit (a lot, if we didn't want a garden ) but would have to move completely away from friends and family to realise much money on the deal, as our area is expensive.

 

I reckon that the memories in a home are beyond "making a packet or deal" and so money in that case is irrelevant. Plus by the time you have counted in the overall cost of moving to a downsized house [financially, stress and loss of a familiar and loved place] you're in more than negative territory.

 

@ARMANDII, I fully accept that there are many like yourself and Jack who haven’t made a mint, and that you weren’t even concerned with making anything from your home; sadly, for every one of you there are two or even three that have taken advantage and pocketed in some way or another – particularly those that bought around here where I am, as many of those bought cheap, lived here for ten or so years, then bailed out to somewhere cheaper buying a home of the same size or greater and pocketing the rest. In some respects, there is a part of me that says fair play to those that have – they worked hard, invested their money in their home, and have reaped the benefits; my issue with it is where it has led with property values now – normal people like myself simply cannot afford to even begin buying a house, whether I like it or not.

The thing that really sticks in my throat however, is the fact that someone like me is almost treated like a second class citizen just because I don’t own my home; credit is more expensive, just because I am a tenant; home contents insurance can also be more expensive (and some companies are not interested in it at all), just because I am a tenant, and then there is the way that some of those who do own property look down their nose at you, just because you don’t own property.

To be honest, I couldn’t give two hoots whether I own property or not – the only reason that I would like to do so is exactly the same as the reason that people like yourself and Jack bought yours, and that is a stable home for my family where I can ‘pay the rent’ for 25 years with much less of a worry about someone forcing me to move home on their whim.

For the record, I still wholeheartedly agree that the savings rate that is currently being paid to savers is utterly disgusting, however that is not the fault of the younger generation, and nor is it a symptom of them being ‘subsidised’ by low interest rates - - that is the fault of the same greedy swine that financially molested the income of good, hardworking individuals like yourself and Jack, those swine being the bankers.

As far as I am concerned, it all began when building societies started to sell out and become banks; at the time, very few people complained as they were getting windfall payments for doing pretty much nothing more than having an account open with the building society concerned. Back in the day, banks and building societies needed to have savers putting money in so that they could lend it out on the other hand. They were lending that money out at 17% at the front end, so paying a saver 4 or even 5% was peanuts really. Nowadays, they don’t need the money from savers to be able to lend out – they make that money by trading on the stock exchange, trading in big property deals or even from insurances etc; hell, they can even go cap in hand to the BOE and it will give them money for next to nowt; so that fact, coupled with the fact that they have to answer to the share holders, and pay them huge dividends each year, means that savers money is little more than an administrative cost and a nuisance, and therefore they aren’t going to pay much for it.

And the whole thing is made easy by the get out clause that the base rate from the BOE is at rock bottom – utter tosh. If the doings of the banks are so inexorably linked to the BOE base rate, how are they allowed to get away with hiking interest rates on mainstream credit (credit cards etc) to stupidly high levels? Shortly after the start of the ‘credit crunch’ our credit card provider hiked the rate from an almost reasonable 12.9% APR to 29.9% APR overnight. Not a missed payment, not a blemish on our record before or since, but still they get away with more than doubling the interest rate - - how can that be right?

Furthermore, we have all seen the rise of many payday lenders that charge horrific interest rates – but nobody asks themselves why, despite being openly critical of them.

We have an approved overdraft with our bank which we dip into and out of throughout the month (Mrs C is monthly paid, I am four weekly, so they cycle of payments means that we have periods where we are well into the black, and then others where we dip into the red);

Last month, I got a phone call from our landlord wondering if there had been a problem with the rent – upon investigation, I found that our bank (rhymes with Sharkleys) had decided to take out account fees leaving us £60 shy of the £1150 required for our rent; to add insult to injury, they charged us £8 for the pleasure of not paying the rent, and then a further £25 for momentarily dipping into our ‘personal reserve’ (it certainly wasn’t for sending us a letter, as the first we knew of a problem was the call from our landlord). By the time that this came to light, I was my payday the following day, so I wired the money the following morning and all was well.

Last week, I switched car insurance and paid the usual deposit to the new company, two days later the old company came back stating that they had started the policy in August last year, but didn’t take the first payment until the end of September, so I owed them for a month’s insurance. I am awaiting the breakdown of payments to them for the 12 years I was with them, as I think they are pulling a fast one, but in the meantime I have paid the £50, basically to keep my name good.

I checked the bank on Friday night and did a bit of mental maths; in short, our rent always comes out on the 5th or the 6th – I get paid on the 6th this month; IF, and it is a huge IF, the bank took the rent out on the 5th, we would fall foul for the rent again and get hit with charges in and around £35+. I requested a small increase on the overdraft to cover the 24 hour period between the rent potentially going out, and my pay going in – declined. I then looked at the websites of some of these pay day lenders – to borrow £300 for 7 days would cost around £16 – that would allow me to avoid bank charges of nearly double that, and ensure that not only would our rent be paid but also that we would have a hundred or so quid as a bit of a cushion if something else went wrong during the course of the week.

In the end, I borrowed it from a close friend, thus avoiding all charges, but it was an eye opener for me - £16 to a pay day lender for a week and pay the rent, or £35 to Sharkleys for not paying the rent, and not actually borrowing anything; who is the bad guys in that scenario?

Despite everything that has happened, the banking sector still continues to stick their middle finger up at the rest of this country, and the likes of you and I are the ones that suffer – worse still, we and our elected leaders are letting them get away with it.

 

I completely agree, however sadly there are those who don't or haven't looked at it in the way you have - those are the ones I was referring to.

 

We're not at odds here, FC, that's for sure. My sister, who advised me to buy a house when I left the Air Force, moved from house to house a total eight times pursuing the dream of a profit every time she moved in the first years to a bigger and bigger house and then in the last years to smaller and smaller house. To be honest perhaps watching her move over the years was a salutary lesson to me and put me off even contemplating a house move. The stress to the family, delays, expense of Estate Agents, Solicitors, the Movers, etc was too much for me. Plus I couldn't see after all the expense that they were in profit at the finish. In the end she, after her husband died, sold her house and is now living in an apartment and in reality is no better off than when she first started.

Actually, FC, that is slightly ironic as I found that when in the early years of paying a mortgage I was made redundant [3 times in 2 years!!] and needed some assistance from the State it was not forthcoming. Why??, because I was a House Owner, a man of property, and therefore a man of wealth. So the people who were not House Owners were able to claim assistance from the State and I was not. Even though I had paid the NI contributions from the age of joining the RAF at the age of 16 I couldn't get a penny in assistance. Along with other things I learned that paying the mortgage was just the same as paying the rent.......don't pay it and you're on the streets along with your family. It was a hard time and I grew to loathe the Government of Maggie Thatcher and her Thugs as they showed no compassion or responsibility to the unemployed struggling to find employment. The advice from Norman Tebbit to "get on yer bike" was not the help that people needed. I luckily met my mentor who made me into a Manager and taught me that always telling the truth. standing up for yourself and others was the way to go and I survived that first recession. So it's not just the people renting houses that are treated like 2nd class citizens it's basically any one unfortunate to come out of work.

 

Absolutely right @pete - in truth, I even considered buying something up north myself at one stage (lower house price, lower deposit etc) to rent out to try and make a few bob, but I couldn't get a buy-to-let mortgage as I didn't have a mortgage on a house I was living in, and the house prices down here prohibited that.

The one thing I am really glad that I didn't do was to take up an offer of a 'hookey' mortgage; basically, I had a staff member who had a brother that was a mortgage broker, and he offered to get me pretty much any mortgage I wanted, even over 100% of the property value (how the hell that one would have worked, I have no idea), and all I would have to do would be to self-certify that my income was considerably higher than it actually was. I wanted nothing to do with it, as that to me is nothing more than fraud pure and simple, but I do wonder how many stunts like that were pulled before the banking crisis -- and there can be no doubt that it was deals of a similar nature that led to the banking crisis in the first place.

 

You also have to consider that Estate Agents have made a major part in the mayhem and escalation of house prices. After all, the more they can push up the asking price the more they make. A friend of mine who was in the Estate Agent business [but only in Retail and Industrial] has very strong views on the way the Banks, Surveyors and Estate Agents worked together to push up prices.