This week, Chancellor Sajid Javid admitted that reforming inheritance tax rules (IHT) is at the forefront of his mind – and confirmed that a Budget should take place before the end of the year.
Speaking at an event staged by the Institute of Economic Affairs and the Taxpayers’ Alliance, Javid was asked if he would get rid of inheritance tax. Javid said: “We’ve already made some sensible reforms to that tax, but I completely understand the arguments against it. When people already pay taxes through work or investments, capital gains or other taxes, there’s a real issue with then asking them to pay taxes all over again.
“Sensible changes have already been made but it’s something that’s on my mind.”
Currently in the UK, estates are taxed at 40% on any amount that exceeds £325,000, except when the deceased leaves their share above the nil-rate band to their spouse.
“So the good news,” said Afford Bond Tax Director Chris Regnauld, “is that Inheritance tax could be in line for change whenever Budget 2019 takes place.:
The Office for Tax Simplification has also recommended reducing the current seven-year period at which tax may be due on gifts to five years. It also advised replacing various gift exemptions with a single allowance, and implementing a digital system to eradicate complex forms.
“Early financial planning can save you both money and stress,” said Chris Regnauld. “If you would like to discuss IHT further – or update your current arrangements – please contact me at Chris.Regnauld@affordbond.co.uk or use the Contact Us form on our website. Afford Bond are one of Cheshire’s leading accountancy practices with offices in Nantwich and Wilmslow.