Chancellor hints at Inheritance tax reform

Chancellor Sajid Javid has sparked speculation that inheritance tax could be scrapped or otherwise reformed by saying there was “a real issue” around inheritance tax and that it was something that was on his mind.

The Chancellor was speaking at a Conservative conference event organised by the Institute of Economic Affairs and the Taxpayers’ Alliance. He was asked directly if he would scrap the ‘death tax’, and while it did not draw a direct answer, he did say that he understood “the arguments against the tax”. He acknowledged the main argument against inheritance tax saying:

“You pay taxes already through work or through investments and your capital gains in other taxes, there is a real issue with then asking them to, on that income, to pay taxes all over again.”

Mr Javid added that he felt “sensible reforms” had already been made but confirmed that inheritance tax was on his list of matters to address, and later confirmed that there would be a Budget before the end of the year.

Inheritance tax is paid on approximately 5 per cent of all estates each year, often due to careful inheritance tax planning, such as gifting everything above the £325,000 threshold to a spouse. However there is still the need for nearly half of all estates to complete and submit the relevant forms to confirm whether or not inheritance tax is payable.

The current threshold at which inheritance tax becomes payable at 40 per cent of an estate is £325,000.

If you require legal advice in respect of estate planning including will writing, gifting, trusts and inheritance tax, contact one of the estate planning experts at Wilson Nesbitt in Belfast or Bangor by clicking here.