Rumours have been flying around news channels this week speculating on an ‘aspirational offer to voters’ before next year’s General Election, by Prime Minister Rishi Sunak via the Chancellor Jeremy Hunt that the government may look to cut or even abolish inheritance tax (IHT).
As many may know, IHT is the most hated tax by the people of the UK. “They tax you when you are alive, and they tax you when you die” is a phrase we have heard many times.
We urge caution on this and to not be fooled.
Each person in the UK already has:
Most Estate Pay No IHT Already
Most people do not pay inheritance tax on death although given recent property price increases and frozen allowances until 2028, more and more are with Treasury inheritance tax receipts jumping to new records.
Why the Potential Change or Abolition of IHT?
By having an IHT liability, many people start estate planning earlier when prompted. We already have the tools to reduce IHT to zero if required so we see this as a 'vote chaser'. See 13 Ways to Save Inheritance Tax IHT Reduce
If you plan IHT issues successfully, it means your assets may also not be included in any care fees means test.
Make no mistake, given the ageing population and the later life care fees crisis, the Government and your Local Authority would prefer you not to plan for IHT as this means more of your wealth can be assessed in any care fees means test. By potentially abolishing or reducing IHT, they are: