Stephen Lowe, group communications director at Just Group, commented: “The latest IHT receipts data for December will be a welcome end of year bonus for the Government’s coffers as the tax continues to deliver record sums. The latest changes to IHT announced by the Chancellor in the Autumn Budget are likely to see the Treasury collect billions more in Inheritance Tax before the end of decade. According to OBR estimates approximately one in 10 deaths is forecast to incur IHT by 2029-30, almost double the proportion in 2023-24, as the tax begins to bite a wider swathe of Middle Britain. We encourage people to make sure they have an up-to-date valuation of their estate, including a recent assessment of their property wealth, to help them understand if they are likely to incur IHT. Estate planning is complex and professional financial advice can be immensely helpful for people who want to manage their estate efficiently and pass on the maximum inheritance to loved ones.”
Simon Martin, Head of UK Technical Services at Utmost Wealth Solutions,commented: “Inheritance Tax is delivering record receipts for the Treasury as asset prices rise while the thresholds remain frozen in place, a policy that has now been extended until the end of the decade. Additional reforms such as charging IHT on pension wealth at death and limits to agricultural and business reliefs will raise billions more pounds in tax receipts for the Government and increase the proportion of estates liable for the tax. However, there are steps to mitigate the impact of Inheritance Tax and so people should urgently assess the value of their estate to see if they are likely to be impacted. We are seeing a significant increase in clients seeking professional advice around Inheritance Tax to ensure they fully understand the implications of the reforms. There are complexities such as the tapering of the Residence Nil Rate Band for estates of a certain value which can potentially add to Inheritance Tax liabilities.”
Nicholas Hyett, Investment Manager at Wealth Club said: “Inheritance tax continues to be something of a golden goose for HMRC – with a tax take that seems to rise inexorably. It may only affect a small number of estates at present, but that number is growing all the time - suggesting “Britain’s most hated tax” is only set to become more unpopular. What really gets to many people about inheritance tax is the double taxation. You’re taxed on the money when you earn it and again when you die, resulting in combined income tax and inheritance tax rate of 67% for additional rate tax payers – potentially more if you’re also paying National Insurance. One way to avoid the taxman having your cake and eating it too, is to make gifts out of surplus income. By making regular gifts out of leftover income at the end of the month you can pass money on to your loved ones free of inheritance tax. Gifts out of surplus income are particularly popular with grandparents, who use it to pay for things like school or university fees. Avoiding double taxation from inheritance tax is a nice added sweetener.”
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