The chancellor has decided to leave inheritance tax (IHT) untouched in the Autumn Statement today.
Rumours were circulating in the run up to the announcement that we could see Jeremy Hunt cut the tax however more recently many thought this would be delayed until the Spring.
Which Myron Jobson senior personal finance analyst at interactive investor thinks may be the case.
He said: “The chancellor might be saving a few of his plumpest rabbits for the Spring Budget ahead of the general election.”
Missed opportunity
Alastair Black head of savings policy at abrdn believes that no IHT changes is a missed opportunity for the government.
He commented: “The decision to leave IHT untouched is a missed opportunity to simplify what has become an increasingly complex tax.
“This is the era of the Great Wealth Transfer with trillions of pounds set to be passed between estates in the coming decades. We need a system that encourages engagement, not dissuades it, so that people can plan ahead effectively.”
OBR increases IHT forecast again
Following the statement the Office for Budget Responsibility has increased its estimates for the tax for the next six years.
Between 2022-2023 and 2027-28 it now estimates the Treasureyab will collect £2.1bn more than expected in the Spring statement.
The OBR also predicts IHT will bring £47.1bn compared to the estimets at the Spring statement of £45.0bn.
Stephen Lowe group communications director at retirement specialist Just Group, commented: “All eyes now turn to the Spring Budget likely to be this government’s final opportunity to curry favour with the electorate to see if the Chancellor will wield his tax scissors on Inheritance Tax.”
Lack of IHT changes ‘disappointing’
Emily Deane head of government relations at STEP expressed her disappointment at the lack of a review of the IHT regime.
She said: “Work by the APPG for Inheritance and Intergenerational Fairness, which STEP contributed to, shows there are radical yet practical steps the government could take to achieve this aim while ensuring the exchequer doesn’t suffer a significant shortfall.
“Reform could be as simple as reducing the current 40% fixed rate, removing some of the reliefs, and abolishing potentially exempt transfers. A lower fixed rate alone would simplify the whole system thereby decreasing opportunities for avoidance and abuse.”
