Government ‘planning inheritance tax increases in Budget’

According to the BBC, the government is planning inheritance tax (IHT) increases at the Autumn Budget on October 30th.

The BBC suggested that Chancellor Rachel Reeves is planning an IHT raise as part of her plan to increase taxes and cut spending.

The BBC also hinted that the Chancellor and Prime Minister, Keir Starmer, are considering various changes to taxation, including changes to exemptions and reliefs.

IHT currently raises around £7 billion a year for the government. A 40% flat rate applies to any estate worth more than £325,000.

The Centre for Analysis of Taxation stated that the current IHT system is ‘broken’. In a paper published recently, the Centre said that uncapped exemptions mean a quarter of estates worth over £10 million pay a rate of 9%.

According to the Centre, allowances such as Business Relief and Agricultural Relief are generating ‘vast discrepancies’ in the amount of IHT paid by families.

 

October 2024