Autumn Statement 22: Inheritance tax freeze to stay in place until 2028

Hunt confirmed the freeze in the Autumn Statement today (17 November) – his first as chancellor and the first for the Sunak government.

The standard IHT rate is 40%, with the decision on the freeze an expected one that comes against the backdrop of one of the most turbulent economic years in British history.

Despite this, discussions around tax cuts and an overhaul of the tax system in late summer under previous prime minister Liz Truss had raised hopes that IHT would be reduced or even abolished.

Autumn Statement 22: Freeze on income tax thresholds extended

Speaking on his IHT decision, Hunt said: “Even after that, we still have the most generous set of tax allowances of any G7 country.”

IFA Continuum has said the confirmation of the freeze “could lead to many being caught by surprise”.

“The extension means it is likely that more estates will become liable to inheritance tax, thanks to rising house prices and soaring inflation. Many people may find they are caught by surprise at the impact on their estate at an already painful time following the passing of a loved one,” it stated.

The firm continued: “There are also many other measures that people can take to ensure they leave as much wealth as they can to their family instead of the tax man.

“This is one of many areas where a financial adviser experienced in estate planning can really add value.”

Autumn Statement 22: Hunt raises burden for investors with hikes to dividend tax and CGT

Relief in the spotlight

With cost-of-living crisis pressures, advisers will now be looking for an increase in gifting allowances to combat the freeze and help the flow of intergenerational wealth.

Hargreaves Lansdown senior pensions and retirement analyst Helen Morrissey said: “IHT used to be seen as a wealthy person’s tax, but a mix of booming house prices and threshold freezes mean this is no longer the case and this latest freeze will only make matters worse.” 

Indeed, advisers sparked a debate last month after IHT take hit an all-time high for 2022/23 with many saying the 40% take on estates over £325,000 is purely a way to plug the serious holes left by the Truss government.

A majority of surveyed advisers then told Puma Investments that clients gifting money as a tool to mitigate against IHT is getting less and less appealing as inflation soars.

Hunt today labelled high inflation “the enemy of stability” and said his government’s “rock solid commitment to rebuild public finances” would help curb further rises.

Most Related Links :
Public News Time Latest News Sports News Finance News Automobile News

Root link

Related Articles

Back to top button