Is Inheritance Tax to be Abolished?
A rumour that’s been circulating in the media recently has been the possible abolition of Inheritance Tax (IHT).
In the run-up to any Budget or Autumn Statement there are always leaks and rumours. In the run-up to a General Election, there are also usually tax concessions in an attempt to convince the public to re-elect the governing party.
The abolition of IHT would certainly be very popular amongst wavering Conservative voters, given it would enable them to retain more wealth within their family.
This rumour could cause families to delay estate planning until an announcement. If this might apply to you, please remember that Tax planning should only be based on the tax rules that exist at the time, and holding off on the basis of speculated future law changes is risky!
There’s also currently quite a lot of uncertainty around tax changes that may come from a possible change in the Government. The Labour Party have a history of increasing capital taxes and strengthening rules concerning the use of trusts in tax planning. With the Conservatives looking less than secure in Downing Street, it may be sensible to make key decisions sooner rather than later.
Where does the speculation around IHT come from?
The now disbanded Office of Tax Simplification produced two reports in recent years concerning the simplification of IHT and the complicated interactions with capital gains tax (CGT).
It’s not an enormous leap to think the Chancellor could take some of the suggestions from those reports to modify the format of IHT, or abolish it entirely and extend CGT to certain transfers on death.
Do speak to us if you’re thinking about tax planning. We can advise you or introduce you to specialists in the field if you’re considering trusts or similar or need to speak to a Financial Advisor.
Once we have the content from the Chancellor’s Autumn Statement, and we know whether the rumours were true or not, we’ll publish our summary to all subscribers and be in touch with any clients we feel may wish to make any changes to their affairs.
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