According to the Institute for Public Policy Research the Government should replace inheritance tax with a tired system to increase revenues.
A recent report by the IPPR named Death and Taxes illustrated that a capital receipt tax payable on cash and non-cash gifts over £150,000 would raise an extra £1bn.
Director, Nick Pearce for the IPPR say’s ‘Inheritance tax now only raises £2.2bn from a dwindling number of estates. There is no political prospect of radically increasing its scope and revenue so it’s time to give up on it”.
The Death and Taxes Report says the current rate of 40% payable over £325,000 should be replaced with a system which taxes gifts. The system would tax gifts worth between £150,000 and £300,000 at 20%, gifts worth between £300,000 and £450,000 at 30% and over £450,000 at 40%.
Julie Hutchison, Head of Estate Planning at Standard Life say’s, “It’s an interesting paper but I do not think it is possible to project what the impact would be. It’s high time there was a through review of wealth taxation”.
A report by The Office of Taxation Simplification is due to be published before the budget on 23rd March which will review six areas of inheritance tax relief , including potentially exempt transfers.
Gerry Brown, Prudential Tax and Trusts Technical Manager say’s, “The plan has it’s plus points but I have concerns about the complexity of administering it and the need to consider exemptions, particularly business and agricultural asset relief.
With the current state of the government coffers any review is likely to be to the detriment to most of our Clients.
Bluebond Investments specialise and are able to offer financial advice on Inheritance Tax Planning.