Between April and November 2023, HM Revenue & Customs collected a staggering £5.2 billion in inheritance tax (IHT) payments, marking a £400 million increase from the previous year, according to official figures.
For many, the IHT threshold of £325,000 (or £650,000 for married couples) may seem distant, but with rising house prices, more individuals find themselves ensnared in the IHT net. The maximum residence nil-rate band for the 2023/24 tax year is £175,000, meaning your overall IHT allowance could increase to £500,000. The debate over whether IHT should undergo reform or be scrapped entirely has intensified, with over 50 Conservative MPs urging Chancellor of the Exchequer Jeremy Hunt to eliminate it, branding it "morally wrong."
Despite speculation, the recent Autumn Statement did not bring any changes to the IHT regime. However, with the Chancellor's Budget due in March, there is speculation that potential reforms might be announced, possibly positioning them as a vote-winning strategy before the upcoming general election.
As the government's stance on IHT remains uncertain, individuals are encouraged to take proactive steps to minimise their IHT liability. Given the complexity of IHT, seeking advice from a professional financial planner is crucial. Specialists in this field can guide individuals on effective strategies to reduce liability, ensuring that a significant portion of their assets goes to their chosen beneficiaries.
For personalised assistance in managing your estate and navigating the complexities of IHT, feel free to reach out to us. Our team is here to provide insights and support your journey in maximising your legacy for your loved ones.
Sources
https://www.professionaladviser.com/news/4158863/iht-cemented-election-battleground-policy-receipts-soar