Following the General Election on 4 July 2024, the Labour Party is now in government and, whilst they have confirmed some of their policies, there has been very little said about Inheritance Tax. The Treasury received £7.5 billion in Inheritance Tax in the financial year to the end of March 2024. Making changes to this tax would certainly go some way to funding the spending pledges made by the Labour Party.
Inheritance Tax currently applies at a rate of 40% with various exemptions, allowances and reliefs available.
There has been discussion about potential changes, such as the restriction of some Inheritance Tax reliefs (for example introducing personal caps to Business Property Relief and Agricultural Property Relief) and even mention of eliminating certain reliefs altogether. There could also be a rise in the rate of Inheritance Tax from 40%.
Other rumoured changes include how Inheritance Tax applies to gifts made during a person’s lifetime. Currently, if a gift is made and the person making it survives for seven years from the date if the gift, this will pass free of Inheritance Tax. There is the possibility that this could change to implementing a payment of tax at the time the gift is made.
At the time of writing, the potential changes in this article are speculation, and more will be known for certain ahead of the Autumn Budget next month. Any significant changes to Inheritance Tax, as well as any changes to your personal or financial circumstances, are good triggers to review your Will (or to take advice about putting one in place) to ensure that it still meets your needs and is drafted as efficiently as possible from a tax perspective.
If you wish to discuss this further, please do not hesitate to contact Sarah Strong on email: shs@cooperburnett.com or tel: 01892 515022
This blog is not intended as legal advice that can be relied upon and CooperBurnett LLP does not accept any responsibility for the accuracy of its contents.
This blog was originally published in the Tunbridge Wells Business Magazine: https://twbusinessmagazine.com/
