Think tank calls for inheritance tax reform
The Institute for Fiscal Studies (IFS) said in April that the government’s Office for Budget Responsibility (OBR) had forecast that IHT will have raised £3.5 billion in 2013-14 and that this will increase to £5.8 billion in 2018-19.
The IFS said: “If the increase materialises, this would bring receipts as a share of national income to a level slightly above the previous peaks in 2007-08 and 1986-87…and would be the highest level of receipts since at least 1973-74.
“The numbers paying IHT are also forecast to increase sharply from just 2.6% of deaths in 2009-10 to 9.9% of deaths in 2018-19.”
The institute said the IHT regime needed reform in one way or another, and it looked at options including abolishing the tax altogether, raising the threshold above which it is payable – currently £325,000 – to £1 million or taxing individuals “at progressive rates on the total amount of gifts and inheritances that they receive over their lifetime”.
It added: “Less radical reforms to IHT could also improve it by reducing the scope to avoid the tax. Such a package of reforms could involve removing or reducing the reliefs given for agricultural land and business assets and extending the reach of the tax to gifts made more than seven years before death…But whatever happens IHT should not live on in its current form.”
There are many options available which can reduce the tax liabilities on assets for individuals, making a significant difference to their estate left available for inheritance.
At Royds, our exerts can provide specialist advice and guidance to individuals regarding protection of wealth and assets for future including the benefits of lifetime gifting, inheritance tax mitigation, long term care funding solutions and effective estate planning.