July 14, 2016

Threat of IHT rise continues to cause some unease

One of the last major policy announcements of the previous Chancellor, George Osborne, was a commitment to further cut Corporation Tax for businesses.

The pledge, designed to encourage continued investment into the UK, led to concerns about a possible hike in personal taxes, including IHT, to compensate for the hole in tax receipts.

While Mr Osborne’s successor, Philip Hammond, has today ruled out an emergency Budget, there are lingering concerns about the possibility of a hike being announced in the Autumn Statement in a few months’ time.

At the back of people’s minds are likely to be comments made by the Treasury a week before the referendum ballot.

At that stage, Mr Osborne listed a number of possible tax increases which might have to be considered in the event of a “leave vote”, including a 5p increase in the IHT rate.

Some commentators have suggested the remarks were made at a time when Remain campaigners were fighting to regain momentum in the debate and that the tax rises are unlikely to materialise.

Not only would the Government be going against promises made prior to last year’s General Election, but experts have suggested that altering the 40p rate of IHT would in all likelihood generate precious little revenue.

For legal advice on Inheritance Tax planning please contact Tony Millson and Deanna Hurst in Royds’ Private Client team.

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