Inheritance Tax - IHT - where are we now?

There was much talk recently about the possibility of Jeremy Hunt making changes to inheritance tax (IHT) in his Autumn statement of 22nd November.  There had been rumours that IHT was being scrapped altogether or that instead of a 40% tax charge it would be reduced to 20%.

 

Ultimately, this was all speculation as IHT was missed out of the budget completely and the Chancellor chose to focus on National Insurance reductions.  

 

IHT will continue to be charged at 40% on estates worth over £325,000 plus a potential extra £175,000 for passing a property down to descendants.  Married couples can make transfers to each other tax free leaving a potential allowance of £1m.  It was always believed that IHT was only a tax on the wealthy however HMRC received £4.6 billion through IHT during the first seven months of the 2023/24 financial year.

 

Even someone with a modest estate can now be liable for IHT if, for example, their property keeps rising in value.  The constant rise of property prices over the past few years have pushed more and more people over the IHT threshold.

 

 

It is vital to meet with a professional who will be able to talk through your estate planning options.  This could mean creating a Will or amending your existing one, creating Lasting Powers of Attorney and discussing possible IHT exemptions and reliefs that could apply to your estate.  

 

As it seems that currently there will be no change to the IHT rules, it is essential that people take the appropriate advice as soon as they can.  Please feel free to get in touch with our Private Client department if you have any questions or concerns about estate planning and we would be happy to assist.