“Inheritance tax nil-band freeze will cost families an extra £234k”

Nov 11, 2024 | Tax

An independent (financial adviser’s) view

The stealthiest of stealth taxes has been the freezing, and in the case of Inheritance Tax, deep-freezing of tax allowances. With inflation now ever-present, the fact that income tax bands have not increased since 2021 and are now not due to be thawed for at least another 3 years has put £billions already into the needy Treasury. The IHT nil-rate band has not changed for an unbelievable 15 years now, while, despite crashes and every other type of catastrophe your assets are certainly worth a bit more than they were then. OK, the extra main-residence exemption has since been added, but that, too, has not been reviewed or increased in the last seven years, while house prices have and still are continuing, amazingly, to rise and often soar. If allowances had kept pace with inflation, as was always supposed to be the case, the total available would be around 60% more. Although only a small proportion of estates pay this tax blah blah as the government always says, one must conclude that they certainly don’t intend that to remain the case.

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