Inheritance tax reform back on table as ‘leg work’ done for Truss and Sunak | Personal Finance | Finance

Inheritance tax is commonly loathed in the UK, with many viewing the levy as a “death tax” or restrictive on income before death. There have long been calls for the levy to be reevaluated, with some asking for reform, while others saying it should be scrapped altogether.

The tax has been a topic of discussion in the Tory leadership race, which has heavily centred on the potential for tax cuts.

Neither Rishi Sunak or Liz Truss has fully committed to any specific reform to inheritance tax.

However, both candidates have said they would be reviewing the tax if they inherited the keys to Number 10.

One expert has suggested this could signal towards inheritance tax being on the political agenda in the coming months.

READ MORE: How your pension could help you slash inheritance tax to zero

Some have suggested inheritance tax is too complicated as it currently stands, and could benefit from being changed to an already familiar system.

In a similar sense, another argument is that inheritance tax should be slashed from its current rate of 40 percent.

This was argued, amongst others, by AAT, with Phil Hall, Head of Public Affairs and Public Policy at the group, stating: “By halving the very high headline rate, incentives for avoidance or evasion will be removed. This is likely to increase the tax take.”

Other suggestions have included increasing the current allowances, and boosting the annual gifting rules currently in place.

An HM Treasury spokesperson previously told “The vast majority of estates do not pay inheritance tax – more than 93 percent of estates are forecast to have zero inheritance tax liability in the coming years – however the tax raises more than £6billion a year to help fund public services millions of us rely on daily.”

Source link