Mounting speculation of Inheritance Tax changes to come
Newsletter issue – October 2024
As speculation mounts that the new Government will soon make changes to raise more money for the Treasury via Inheritance Tax (IHT), it seems we're already set for the highest receipts on record this year.
The latest HMRC stats show IHT receipts for April 2024 to August 2024 are £3.5 billion. That's higher by £0.3 billion compared to the same period last year.
With the Budget fast approaching on 30 October - the new Chancellor Rachel Reeves' first chance to stamp her authority on the public finances - there's a lot of chatter about IHT being one of the headliners.
What exactly might change? Could the existing favourable treatment for agricultural and business property come to an end? At the moment these types of properties gain tax relief of either 50% or 100% of the value of the assets.
Another element that may be tinkered with concerns what is sometimes referred to as a 'double benefit' loophole surrounding IHT and CGT and revaluation on death. Often, when an asset is passed down to a beneficiary, its value is raised to market value. In turn, that cuts the amount liable to CGT.
Some political commentators have also suggested that residential nil rate band may also be tweaked. Will the Government cut or lower it? Right now, if homeowners leave their main home to their children, they can increase their nil rate band by up to £175,000, or £350,000 if they are a couple. Gifts made to individuals could also be another area where the Treasury tinkers. At the moment these are exempt from IHT seven years before a person dies.
The previous two tax years have set a record high for IHT receipts with £7.5bn in 2023/24 and £7.1bn in 2022/23.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services