Budget 2018: predictions, hopes and fears

With the Budget only a few days away, industry experts share their views on what to expect

Inheritance tax

Many have speculated on the possibility of reforming the inheritance tax (IHT) system arising from the Budget, but not all experts seem to think alike.

Henny Dovland, IHT expert at Time Investments, said: “There is speculation that the chancellor will make changes to the UK’s highly complex IHT regime. This would be a welcome move as the number of families in the UK being caught in the IHT net continues to increase.

“Even if positive changes are announced, we still urge investors to take advice to ensure they are optimising their IHT planning.”

Quilter’s Griffin disagreed. She said: “We do not expect any fundamental changes to IHT because the Office of Tax Simplification [OTS] has consulted on opportunities to simplify IHT and is set to propose a package of remedies.

“Its report on simplification is in two halves – with the first half pitted to be released prior to the Budget and the second, potentially more significant, half set for 2019. We also expect a consultation paper on taxation of trusts, which was referred to in the 2017 Budget.

“Simplification of IHT should not be a haphazard amendment of already complicated taxes. It needs to be a series of considered changes so that the public can appropriately plan for their futures.”

Others, instead, believe that the reform of the IHT system will come after Brexit.

“We know that UK inheritance tax (IHT) is currently subject to a review by the office of tax simplification and its report is expected any day – it should be released before the Budget and that is only a matter of days away now” said Canada Life International’s Christian.

“It must be remembered that the OTS is not empowered to make policy changes so whilst its report could be interesting, any changes are likely to come after consultations and maybe Brexit.

“The UK IHT system does need simplifying; some aspects such as the residence nil rate band, add an unnecessary layer of complication for a benefit only available to those who own a property and have children. Why not just increase the normal nil rate band so that everyone can benefit and the rules are simplified.”