Possible Inheritance Tax Increases

There may be Inheritance Tax increases on the way according to a report by the Express. This may be used in the effort to recover the economy following the COVID-19 pandemic. It is one of the proposed tax increases that the Chancellor could potentially be planning.

This tax increase could happen as the UK has once again entered recession, with a 20.4% contraction. There are several taxes that may increase as part of the chancellor’s plan, and inheritance tax is only one of them. We will therefore be keeping a close eye on what the chancellor says regarding this subject.

Inheritance Tax Increases

Inheritance Tax is an important factor when you are writing your Will. The current rules of inheritance tax are as follows:

  • There is usually no inheritance tax to pay if the value of your estate is below the threshold, which is currently £325,000.
  • You also do not need to pay if you leave everything above the £325,000 threshold to your spouse, civil partner, charity, or a community amateur sports club
  • Inheritance tax has a rate of 40%. This is only charged on the part of your state that is above the threshold.
  • If you donate more than 10% of the value of your estate to charity in your Will, then the inheritance tax may reduce to 36%.
  • When you leave your home to your children, stepchildren, adopted or fostered children, or grandchildren, the threshold for Inheritance Tax may increase to £500,000.

Some gifts that you give whilst you are still alive may also be taxed. This depends on when you gave the gift and what it states in your Will.
These may also rise in the potential new rates that the chancellor is considering, and it may affect you and your Will in different ways.

What the Inheritance Tax Increases May Mean for You

We do not know what the plan is for inheritance tax yet, and we also do not know when these rules may come in to force. However, they could affect a lot of people. The increases are likely to mean that your loved ones get less than you would like when you die. This is why it may be essential to speak to a legal expert to see what your options may be. There may also be changes to the threshold, which could also affect your Will.

Whilst there may not be anything you can do about the Inheritance Tax increases if and when they do happen, seeking legal advice may help you to understand the whole process of inheritance. It may also help you understand what the increase can mean for inheritance.

How We Can Help

Here at The Inheritance Experts, we work with solicitors who have years of experience in dealing with all manner of Inheritance matters. Contact us today by filling in our contact form, or call us on 01614138763 to speak to one of our friendly knowledgeable advisors.

0161 413 8763

7 days a week from 8am - 9pm

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