Is It The End For UK Inheritance Tax? – Wealth Managers’ Reactions
- On October 4, 2023
- By GrowthInvest Marketing
With the Conservative Party starting from Sunday, attention will focus on whether the party might promise to cut or even axe inheritance tax. We analyse what’s at stake and take views from a variety of advisors. Public support for scrapping IHT appears to be rising.
As the annual autumn season of UK political party conferences rolls on, with a general election due for some point in 2024, tax is on the agenda. Taxes are at the earliest levels since the early 1950s.
Prime Minister Rishi Sunak recently caused consternation among parts of the media and political classes (if not all the public) by calling for the ban on sale of new petrol/diesel cars to be delayed until 2035 instead of its previous 2030 date. This kind of move to a more overtly “free market” sort of stance might also mean the Tories, still trailing the opposition Labour Party by a significant (if narrowing) opinion poll margin, might go for other policies to appeal to traditional middle class supporters. And that means cutting or even scrapping inheritance tax (IHT).
Pressure to remove the tax appears to be growing. A Kingsley Napley/YouGov poll released on Friday last week found that 55 per cent think IHT should be completely scrapped, up from 48 per cent taking that view in October last year. 33 per cent are opposed to abolishing IHT and 13 per cent have no view.
Since 2009, the “nil-rate” IHT threshold has stayed at £325,000 ($397,922) – it doubles for spouses to £650,000). In March this year, the average price of a house in the UK was £285,000, according to official data. For many in London, the Southeast and the more affluent areas, it’s significantly higher. While still affecting only a relatively small number of the adult population, IHT is biting harder, and hitting a wider variety of people than was perhaps envisaged when “death duties” were first introduced before the First World War.
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