Inheritance Tax - Autumn Budget (Part 3)

Inheritance Tax: Anticipated Reactions to Tomorrow’s Budget

In the final instalment of our three‑part series, we turn to the public and professional reactions we expect if the Chancellor moves ahead with the rumoured changes to inheritance tax (IHT).

Likely Reactions

• Many families and households will welcome any increase in thresholds, but restrictions on gifting or pensions could spark frustration, particularly among middle‑income households already feeling squeezed.

• IHT is often described as Britain’s “most hated tax.” Any changes will spark debate about fairness, especially as more middle-income households are affected by a tax that was once only for the wealthiest.
• Perception of double taxation. Many argue that IHT taxes money that has already been taxed during a person’s lifetime.

Preparing for Change:

• We expect to see a rise in clients looking to make lifetime gifts earlier in life, especially if the gifting rules are increased from 7 years to 10 years, meaning a gift will need to be made over 10 years before your death before it will not be considered part of your taxable estate when you die.
• We are offering to our clients Estate Planning services to utilise the regular gifts out of surplus income strategy, unless of course this is restricted in the upcoming budget. Currently, this is a highly effective estate planning tool.
• It is more important than ever to ensure that you have a professionally prepared Will that ensures you are choosing the most tax-efficient options and utilising all your allowances effectively.

With the Budget due tomorrow, now is the time to stay alert to announcements, as reforms could take effect quickly.

After the Budget, we’ll be sharing a detailed breakdown of the announced changes and outlining how we can support our clients in managing their impact. Look out for our follow‑up article later this week.