Budget 2024: Missed opportunity for Inheritance tax reforms?
As expected there was no change to Inheritance Tax (IHT) thresholds with the ‘nil-rate band' remaining at £325k and the ‘residence nil-rate band’ at £175k.
This could be a missed opportunity as we’ll likely see more estates paying Inheritance Tax due to the effects of inflation and rising property values.
The Chancellor also announced plans to abolish Non-Domicile status - The domicile rules provides some people who are tax resident in the UK with an opportunity to secure an undue tax advantage based solely on their domicile being outside the UK, this advantage is heavily skewed towards the wealthy.
The intention looks to move to a simpler, residence-based regime for Inheritance Tax and it’ll be interesting to see how a consultation on the best way to achieve this looks.
No changes to IHT will take effect before 6 April 2025. So, one wonders how and when this plan will get off the ground given there is an election looming.
Lastly from 1 April 2024, personal representatives of estates will no longer need to have sought commercial loans to pay inheritance tax before applying to obtain a “grant on credit” from HMRC – could this be the end of the market for IHT loans?”
Read more about Irwin Mitchell's expertise in Inheritance Tax Planning.
