Inheritance tax (IHT) is a hot topic but it has failed to feature in two of the main political parties’ election manifestos.
With the tax payable at 40 per cent on estates valued at more than £325,000, the Conservatives say they will take the family home out of tax “for all but the richest” by increasing the effective threshold for married couples and civil partners to £1 million via a new transferable main residence allowance of £175,000 per person.
UKIP says it will scrap what it calls the “hated death tax” while the Green Party has promised fundamental reform of IHT by replacing it with an accessions tax.
The Greens said: “We would make the level of the tax depend on the wealth of the recipient, not the donor, so that all bequests to individual recipients who have less than £200,000 would be tax free.”
But Labour’s 86-page manifesto and the Liberal Democrat’s document – which runs to 158 pages – both fail to mention the issue.
Whoever forms the next government following the 7 May general election, inheritance tax is likely to undergo reform in the future.
With the number of estates liable to IHT projected to double from around six per cent now to 12 per cent by 2019, more and more taxpayers could find it necessary to take tax planning measures.
Moore Thompson and MT Financial Management can provide expert advice on inheritance tax and broader estate planning to maximise inheritance tax efficiency. For more information on how we can help, please contact us.