PM hints at inheritance tax change
25th March 2014
The inheritance tax (IHT) threshold should be raised above its current £325,000 limit for individuals, Prime Minister David Cameron has said.
Speaking at a meeting in East Sussex, the Prime Minister suggested that IHT should "only really be paid by the rich."
Although the IHT threshold usually rises in line with inflation, it has been frozen at £325,000 since 2010 and is planned to remain at this level until 2017/18. This has meant that an estimated 5,000 additional estates will be affected by IHT each year.
An Office for Budget Responsibility (OBR) report published in March 2014 revised IHT revenue figures upwards for the next six years.
The OBR now forecasts that:
- In the 2013/14 tax year, IHT will generate £3.5 billion of Government revenue
- This rises to £3.9 billion in 2014/15
- By the 2018-19 tax year, IHT receipts will total £5.8 billion.
"I believe in people being able to pass money down through the generations and pass things onto their children," Mr Cameron said.
"It [IHT] shouldn't be paid for by people who've worked hard, who've saved and who've bought a family house."
Contact us today to discuss your estate planning in order to minimise your liability to IHT.