Raising IHT threshold could cost government £6bn
- On November 15, 2023
- By GrowthInvest Marketing
Raising the inheritance tax (IHT) threshold to £500,000 and removing the Residence Nil Rate Band (RNRB) would cost the Treasury an estimated £6bn from 2024/25 to 2027/28, new analysis from Quilter has suggested.
The research shows this move would cost the Treasury £1.4bn and prevent around 12,500 families paying IHT per year.
According to Quilter, 27,000 estates paid IHT in the 2020/21 tax year.
The analysis revealed that if the Treasury instead chose to reduce the rate of IHT from 40% to 30%, it would cost the government £7.7bn from 2024/25 to 2027/28.
In this scenario, the same number of estates would pay IHT, but their bills would be reduced.
If the rate of IHT dropped even further to 20% it would cost the government £15.4bn from 2024/25 to 2027/28.
There have been rumours circulating Whitehall and the press that £15bn of fiscal headroom may be used to help pay for a reduction in the headline rate of IHT.
In addition, there has also been speculation ahead of the Autumn Statement, on 22 November, that IHT rules may be relaxed to lower the headline rate currently set at 40% or by increasing Nil Rate Band (NRB).
GET IN TOUCH!
CALL US020 7071 3945
FOLLOW US ON
Throughout our site you will find links to external websites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers.