In recent weeks, a number of media reports have suggested that the Chancellor of the Exchequer may be considering an overhaul of Inheritance Tax (IHT) which might even involve scrapping the tax completely in favour of an alternative revenue raising option.
Chancellor Rishi Sunak is reported to be considering reforming IHT and although details of his plans are still veiled in secrecy, some commentators believe the changes could be radical.
What is known is that the Government needs to put in place measures to balance the country’s books as a result of the £100billion Covid-19 financial black hole.
Last year, Inheritance Tax brought in £190million – a four per cent rise from the previous year, taking the total paid in IHT to £5.4billion in 2020-2021.
IHT revenue is expected to reach an all-time high of £6billion in 2022 due to a combination of COVID-19 deaths, rising house prices and a five-year freeze in tax protections announced in the spring Budget.
Despite bringing in a sizeable chunk of revenue each year, it is believed the Government may be planning to reform how estates are taxed. The Chancellor’s predecessor Savid Javid went on record during the 2020 Conservative Tory Party conference, saying that he could consider scrapping the tax completely.
Regardless of what reforms the Government eventually decides upon and, even if IHT is ultimately replaced with a Wealth Tax, it is important to plan ahead wisely.
At MGI Midgley Snelling LLP we are able to explain, in no-nonsense terms, how tax issues might impact on your client’s estates.
To find out more, please contact us.
