News from the Conservative party conference in Manchester this week, other than Brexit, is that Chancellor Sajid Javid could be considering scrapping inheritance tax (IHT).
Speaking at a fringe event at the conference, Mr Sajid said the levy is a “real issue” adding that he is considering taking action on what opponents brand the “death tax”.
The IHT rate is currently 40 per cent, and applies to the part of an estate that is over £325,000. Any assets passed on to a spouse or civil partner are exempt from the tax, but the estate then becomes eligible when they die.
When asked if Mr Javid would consider scrapping the tax, he replied: “We have already made some sensible reforms in that tax … I shouldn’t say too much now but I understand the arguments against that tax.” Adding: “I do think when people have paid taxes already through work or through investments and capital gains and other taxes there is a real issue with then asking them on that income to pay taxes all over again.”
A latest Office for Budget Responsibility forecast shows that IHT is expected to raise £5.3 billion for the Treasury in 2019-20. That would represent 0.7 per cent of all receipts and is equivalent to 0.2 per cent of national income. Just last week, the Brexit party chairman, Richard Tice, described IHT as “the most hated, the most unpopular tax in this country”.
With specialist advice, forethought and sensible tax planning inheritance tax can be mitigated. Our Beavis Morgan tax experts are available to guide you and advise on the available strategies.
For more information on this topic or to discuss how we can help you effectively structure your finances for tax and save you money, contact your usual Beavis Morgan Partner.
Tax Advice: Mitigating inheritance tax