Assets exempt from IHT to grow in popularity as freeze takes toll
- On January 4, 2023
- By GrowthInvest Marketing
Assets exempt from inheritance tax will likely rise in popularity over the next year as more households move past the frozen tax threshold.
In March 2021, prime minister Rishi Sunak – then chancellor – froze the nil rate band at £325,000 until April 2026.
Then last month in his Autumn Statement, current chancellor Jeremy Hunt extended the freeze by a further two years, to 2028.
Any estate which exceeds the £325,000 threshold is charged 40 per cent in IHT.
The further freeze is expected to push up IHT receipts from £6.1bn in 2021/22 to £7.8bn in tax year 2027/28 – an increase of 28 per cent or £1.7bn, according to Office of Budget Responsibility figures.
If the nil rate band had risen in line with inflation, today it would be worth £407,000 and projected forward to tax year 2027/28 it would be over £500,000.
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