Abolishing Inheritance Tax
Posted: May 18, 2018
Abolishing Inheritance Tax?
The Resolution Foundation for the Intergenerational Commission has proposed a radical overhaul of the current inheritance tax regime as we know it. It is often seen as the least fair tax and is highly unpopular among those who are unfortunate enough to bear the costs out of their loved ones’ estates.
The tax raised £5.2billion in the 2017/18 tax year, the highest on record, even though only 4% of estates are subject to inheritance tax.
The report calls for inheritance tax to be scrapped altogether and replaced with a new Lifetime Receipts Tax. Those benefiting from any inheritances would be taxed, instead of the deceased’s estate – but only for inheritances beyond a lifetime allowance. The report maintains that this new system would be fairer to families and harder to avoid.
This comes at a time when Angela Knight, the chairman of the Office for Tax Simplification and former MP, has said that inheritance tax will be examined to establish if it is “fit for purpose”.
Lee Baron, of Painters Solicitors, says that “inheritance tax is a complicated area and clients should seek advice at the earliest opportunity, particularly those dealing with a deceased’s estate. Significant exemptions, potentially worth up to £1million (such as the transferable nil rate band and the residence nil rate band), can be lost if professional advice is not taken. It is also advisable to review your Will to ensure that the wording of the Will does not jeopardise the availability of these exemptions.”
Please contact a member of our Wills & Probate team for further advice.