Inheritance Tax – a new regime on the horizon?

21 Feb 2020

Our Inheritance Tax (IHT) regime may have its roots in the late seventeenth century, but even now commentators maintain that the laws surrounding IHT are extremely complicated, baffling families and executors at a time when they may be struggling with a bereavement.
 
The powers that be may, however, be set to take note, with talk of a complete overhaul of IHT on the horizon.
 
The All Party Parliamentary Group for Inheritance and Intergenerational Fairness (APPG) was established last year “to promote understanding of the issues generated by inheritance and intergenerational fairness and to facilitate discussion on methods of reform”.
 
The APPG published a report in January 2020 recommending a complete overhaul of the IHT regime that would make it simpler and fairer.
 
The proposed reforms for discussion include:
 
  • IHT, currently charged at 40% on estates worth more than £325,000 (£650,000 for married couples), to be replaced by a tax of 10%, unless the estate is valued at more than £2m, in which case the tax would rise to 20%
  • The majority of exemptions, such as Business Property Relief (BPR) and Agricultural Property Relief (APR) would be scrapped, although the spousal and charity exemptions would remain
  • The uplift for Capital Gains Tax (CGT), whereby assets are rebased on death, would also be abolished
  • A gift tax would be brought in with a 10% tax charge on gifts over £30,000
 
The APPG’s report is essentially a discussion document, and whether any of the proposals – many considered quite radical – make it to the forthcoming Budget remains to be seen.  The one thing that we can be sure of is that with IHT forecast to raise £5.3 billion in 2019-20, it’s here to stay; looking to the future, it’s to be hoped that the system is set to become easier to understand and administer.
 
Our experienced Private Client team have an in depth understanding of bth simple and complex IHT  issues; if you would like to discuss IHT and estate planning or any other matters, please do call.

Further reading

IP in pole position in 2021

Blog
12/01/2021
Victoria Watt takes a look at a hat trick of car-related cases that concluded last autumn that place IP firmly in the headlights
Read more Read

Happy New Year for leasehold property owners

Blog, Legal Updates
07/01/2021
Lawrence Morley looks at government reforms that will make it easier and cheaper for leaseholders to buy  their homes
Read more Read

Mission accomplished! DMH Stallard completes charity trek to and from the North Pole in aid of St Catherine’s Hospice

Blog, News & PR
24/12/2020
DMH Stallard completes Christmas charity trek from the North Pole to St Catherine's and back, raising money for a fantastic cause.
Read more Read

(Supply) chain reaction

Blog, News & PR
23/12/2020
It’s no time to shy away from chasing debt when it’s your cashflow under pressure. Kelly Mills provides the focus.
Read more Read
  • Brighton Office

    1 Jubilee Street

    Brighton

    East Sussex

    BN1 1GE

  • Gatwick Office

    Griffin House

    135 High Street

    Crawley

    West Sussex

    RH10 1DQ

  • Guildford Office

    Wonersh House

    The Guildway

    Old Portsmouth Road

    Guildford

    Surrey

    GU3 1LR

  • Horsham Office

    Ridgeland House

    15 Carfax

    Horsham

    West Sussex

    RH12 1DY

  • London Office

    6 New Street Square

    New Fetter Lane

    London

    EC4A 3BF

  • Get in touch