In the lead-up to the upcoming general election, there’s a buzz about potential changes to the inheritance tax landscape in the UK. The Conservatives are contemplating a bold move: scrapping inheritance tax altogether. This tax, often labelled as ‘the most hated tax in Britain’, has long been a point of contention for many. The idea of assets being taxed twice – once during a person’s lifetime and then again after their death at a whopping 40% above the available allowances – doesn’t sit well with most.
Het huidige scenario
As it stands, the inheritance tax threshold is set at £325,000, a figure unchanged since 2009. In 2017, an extra allowance for homes passing to direct descendants was introduced. Perhaps surprisingly, in view of the frequency with which inheritance tax is raised in the media, very few estates are actually required to pay inheritance tax. In the 2020/2021 tax year, only 3.73% of deaths led to an estate facing an inheritance tax charge. This is in stark contrast to many other countries which impose inheritance tax. For example, in Belgium 48% of deaths incurred a tax.
Het conservatieve perspectief
Yet as a much larger percentage of people are concerned that their assets zal attract inheritance tax when they die, it is perhaps not surprising that the Conservatives consider that alleviating this worry could prove popular with voters. Indeed, the Conservatives’ 2007 policy announcement that they would raise the inheritance tax allowance to £1 million is regarded as a key factor in Gordon Brown’s decision not to call an election at that time.
Het spel met getallen
Uit een recent rapport van het Institute for Fiscal Studies blijkt dat successierechten slechts 0,3% bijdragen aan het BBP. De geschatte kosten van een volledige afschaffing zouden 7 miljard pond bedragen. Hoewel dit in het grote geheel een bescheiden bedrag lijkt, is het de moeite waard om te bedenken wie het meeste baat heeft bij deze verandering - meestal degenen met de grootste nalatenschappen.
Hervorming vs. Afschaffing
For this reason, there are proposals to simply reform the tax to reduce the perceived unfairness, rather than completely abolishing it. There are various reforms that could be made. These range from reducing the rate payable and increasing the threshold, to more radical measures such as bringing more pension pots into the scope of inheritance tax and capping the generous business and agricultural property reliefs which are often used by larger estates. However, these do not capture the headlines in the same way as scrapping inheritance tax entirely.
Parlementaire overwegingen
Voordat er substantiële veranderingen kunnen worden doorgevoerd, zal het Parlement de cijfers en suggesties van het Institute for Fiscal Studies moeten afwegen. Gezien het huidige economische klimaat is het afschaffen van een belasting die goed is voor ongeveer 7 miljard pond aan inkomsten geen beslissing die lichtvaardig moet worden genomen.
Countries such as Australia, Austria, Canada, New Zealand and Sweden which did scrap inheritance tax mostly did so a long time prior to the global financial crisis. It is therefore quite possible that inheritance tax in the UK will continue to haunt our estates for longer, and it could be a risk to labour under the impression that inheritance tax will be scrapped, rather than getting your affairs in order, to maximise use of the exemptions. Though its removal may be a possibility, inheritance tax remains for now.
Navigeren door successierechten
For a more comprehensive understanding of how the current inheritance tax landscape may impact your estate, or to explore strategies for minimising the tax burden, reach out to our Particuliere klant Department at PrivateClient@rfblegal.co.uk.
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- Nieuws Auteur:Senem Osmankan
