<img alt="" src="https://secure.mass1soma.com/153281.png" style="display:none;">

UK Government Rethinking Inheritance Tax

UK Government Rethinking Inheritance Tax

UK Government Rethinking Inheritance TaxThe current UK Chancellor, Sajid Javid, has indicated that the Conservative Government favours further changes to, or even scrapping, the inheritance tax regime.

In what was one of his final policy announcements before new elections were called, Javid had indicated that he was mulling reforms to inheritance tax policy in the UK.

Responding to a question on whether the Government would repeal inheritance tax, Javid said:

"sensible changes have already been made, but it's something on my mind."

He acknowledged criticism of the levy from those who consider inheritance tax a form of double taxation, in that income or gains are taxed during life and then again on death.

UK Inheritance Tax rules

Under the UK's inheritance tax framework, tax is due on the value of a person's estate that is above £325,000. Amounts beyond this threshold are exempt if left to a spouse, civil partner, a charity, or a community amateur sports club.

In addition, an increased threshold of £475,000 applies where the deceased person gives their home to their children (including adopted, fostered, or stepchildren) or grandchildren.

Just 4.6% of UK deaths resulted in an inheritance tax charge in the 2016/17 tax year. The UK earned £5.4bn from inheritance tax in the 2018/19 tax year; up 3% year-on-year.

Related Posts: 

UK Elections on December 12

Inheritance tax changes could have been included in a pre-election Budget that had been scheduled for release on 6 November 2019. However, Javid was forced to cancel the Budget due to the UK's parliament being dissolved on the same date.

Javid had said a Budget was necessary to:

"shape the economy for the future."

However, Shadow Chancellor John McDonnell had labelled the move:

"an electioneering stunt rather than a Budget to rebuild our stalling economy and reset the direction of our country."

Only time will tell whether the Conservative Party will return to power, either with a parliamentary majority or by forming a coalition government.

If it achieves the majority it is seeking in the upcoming elections, inheritance tax reforms could well be on the cards in the near future. Another hung parliament, however, could result in stasis once again.

The Conservative Party has indicated that it will keep its card close to its chest as other parties begin to make pre-election pledges. Controversially, the Party will reportedly only release a full manifesto two weeks before elections are to be held, in a bid to outmanoeuvre its rivals.

As yet both the Conservative Party and the Labour have said little in the area of tax policy, with both seeking to win the voting public's hearts and minds with promises of considerably higher public spending.

Choose Ireland For Business - Whitepaper

The Tax Reliefs Currently On Offer In Ireland
Read More
US Tax Residency Guidance For Those Stranded As A Result Of COVID-19
Read More
UK Delays Expansion Of Making Tax Digital
Read More
Ireland To Expedite Payment Of The Research And Development Tax Credit
Read More

 Blog Comments