A leading business organisation has called for sweeping reforms of inheritance tax (IHT) in the run-up to the general election.
The Institute of Directors (IoD) published the first of a series of pre-election policy papers on taxation on 31 January, in which it said that taxes bringing in less than £5 billion a year should be challenged with a view to scrapping them or merging them with other taxes.
It said these taxes would include stamp duty on shares (raising £3 billion a year), capital gains tax (£5 billion) and inheritance tax (£5 billion).
Taxes that raised more than £5 billion annually should be subject to wide-ranging simplification and tax rate reductions, it said.
Calling for a “more radical agenda for tax reforms”, the IoD also recommended a consultation on merging capital gains tax and IHT so that capital was “only taxed once and at a rate sufficiently low to obviate the need for the more complex reliefs”.
While the outcome of this May’s general election may well spell change for the inheritance tax regime in the future, anyone with an estate that may be vulnerable to IHT under the current framework would be wise to seek expert advice now on reducing liabilities.
With the tax levied at 40 per cent on the value of estates above £325,000, the family of someone whose assets include even a fairly modest home could well find themselves hit with an unwelcome tax bill on their death.
For more information on all aspects of IHT planning, please contact Moore Thompson’s inheritance tax experts.