Tax is a topical subject. At the time of writing, it’s being reported that the Chancellor, Rishi Sunak, speaking at the Conservative Party conference, has studiously avoided answering questions about whether local authorities will be allowed to raise Council tax or whether there might be further increases in income tax planned. He may be keeping his powder dry on these issues, but has already announced that both the nil rate band and residence nil rate for inheritance tax (IHT) would remain frozen at existing levels until April 2026.
Consequently, HMRC has been able to collect more than £6bn in inheritance tax in the past 12 months. This is the highest figure ever.
Worryingly, it seems that rises in Council tax and income tax may not be the only ones in the pipeline. Writing in the accountancy trade press, accountancy group UHY Hacker Young “also noted that there is speculation that the Treasury will increase IHT rates in forthcoming budgets as the government looks to reduce borrowing following the pandemic.”
There are measures you can take to reduce inheritance tax. Consulting a genuine tax specialist (we can suggest one!) is a good first move.
Vivian Linstrom, M&S Accountancy & Taxation