We are led to believe that no stone will be left unturned as the Government desperately seeks to find ways to plug the gaping black hole in public finances – and the Government seemingly has its sights set on inheritance tax as part of the solution.
“IHT is a money spinner for the Treasury, with £3.5bn collected between April 2022 to September 2022 – £400m higher than in the same period a year earlier.
IHT is no longer a tax on the wealthy as runaway house prices and strong investment performance in previous years have dragged an increasing number of estates into the IHT net.
The freezing of the nil rate until at least April 2028 means the government’s IHT takings are likely to keep on rising.
The increase in the IHT takings might feel uncomfortable for some in the context of the cost-of-living crisis, but the revenue will prove useful to the Government to address its colossal spend on coronavirus and cost-of-living support measures as well as to support its spending programme.
With rumours that the freeze on the income tax thresholds, pensions lifetime allowance and now inheritance tax nil-rate band will be extended from 2026 to 2028, it is becoming increasingly likely that a combination of stealth raids on taxpayers and spending cuts will be implemented to get the UK economy back on an even keel.
Myron Jobson is senior personal finance analyst at interactive investor
