The Government Autumn Budget is due tomorrow 30 October 2024 and is forecast to be announcing some key changes. Rachel Reeves, the Chancellor is due to announce Labour's first budget in 14 years and has warned us that it may involve some difficult decisions. They are looking to raise 40 billion from tax hikes and spending cuts to fill the black hole allegedly created by the previous Governments.
Get ready for the broadcast at 12.30 tomorrow which is expected to last about an hour if you want to listen to the tax changes that may affect you.
Inheritance Tax
One of the issues that is expected to be at the top of the Government agenda is Inheritance Tax. Inheritance tax is a charge that is made on some estates after a person's lifetime. There is currently a nil rate band of £325,000 and that band has been frozen at this amount since 2009, some 15 years and was frozen at that rate in 2022 by the previous Conservative Government until 2028. What will happen now to that threshold? This can mean that inheritance tax is due if an estate is worth more than £325,000 although different exemptions and reliefs can apply. Inheritance tax is charged at a one flat rate of 40%. It currently raises about £7 billion a year in tax.
More Tax?
Could this mean that more people will end up paying inheritance tax? House values are rising across the UK placing a lot more families in this tax bracket. This flat nil rate band since 2009 is affecting a lot more people rather than just the upper class families.
This could be a way for the Government to raise taxes discretely as many families are unaware of inheritance tax and how it works. It's an unpopular tax. Most people may not take professional tax advice and their families could be caught out after their lifetime. Many people haven't made a Will. They may make an online Will or a DIY will. This carries many risks as they do not include tax advice. A qualified lawyer can also assess your tax risks and make a tax efficient will, which takes into account your personal assets and circumstances. Everyone's estate (money and property) is different and that carries different tax implications.
It is also speculated that some of the other inheritance tax reliefs may be at risk of changes:
Agricultural Relief for farmland
Business Relief
Gifting rules - Potentially Exempt Transfers (PET's)
Residence Nil Rate Band
It is crucial to obtain professional advice on your money and property after the budget to check what inheritance tax changes affect you. This is especially important if you are looking to make any lifetime gifts, and are affected by Business Relief or Agricultural Relief. Do you know how much tax could be due after your lifetime? Are you looking to save money for you and your family? We can assess your personal circumstances and provide you with bespoke advice on your individual situation.
Please contact us for advice from our tax lawyer on 02921 406152 or on enquiries@calonlaw.com
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