{"id":1608,"date":"2021-08-24T11:18:34","date_gmt":"2021-08-24T10:18:34","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/?p=1608"},"modified":"2021-08-26T11:24:10","modified_gmt":"2021-08-26T10:24:10","slug":"is-iht-change-on-the-cards","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2021\/08\/24\/is-iht-change-on-the-cards\/","title":{"rendered":"Is IHT change on the cards?"},"content":{"rendered":"
\n

It\u2019s been\nthree years since then-Chancellor Philip Hammond asked the Office of Tax\nSimplification to look into potential amendments to the Inheritance Tax (IHT)\nregime1<\/sup>. Since then, no changes have been made to the tax incurred\nwhen wealth passes onto the next generation; could Rishi Sunak be the one to\ntake up the mantle once more?2<\/sup><\/strong><\/p>\n<\/div>\n\n

\n

A significant,\npandemic-shaped deficit means that some unwelcome tax hikes could be on the\ncards. And IHT is a logical target for some economists, who see this tax as a\nway of generating income for the Treasury with little economic impact, as well\nas driving social mobility.<\/p>\n<\/div>\n\n

\n

This was the\nconclusion of research from the Institute for Fiscal Studies (IFS) entitled Inheritance\nand inequality over the life cycle: what will they mean for younger\ngenerations?<\/em> The paper found that inheritances have comprised an increasing\nproportion of national income over the past 50 years \u2013 something that could\ninfluence policymakers\u2019 decisions around the taxation of wealth transfer.<\/p>\n<\/div>\n\n

\n

Inheritance\ninequality<\/strong><\/p>\n<\/div>\n\n

\n

According to\nthe IFS, those born in the 1980s can expect inheritances worth an average 16%\nof their lifetime income \u2013 against just 9% for those born 20 years earlier.\nThis trend is likely to lead to rising levels of wealth inequality between rich\nand poor families. Arguably, a stricter IHT regime could help lessen the\nimpact.<\/p>\n<\/div>\n\n

\n

Younger\ngenerations\u2019 fortunes largely depend on how wealthy their parents are, with the\n1960s and 1980s generations whose parents occupy the top fifth of the wealth\nscale expecting a lifetime boost of 17% and 29% from their inheritances,\nrespectively. By contrast, the boost is just 2% and 5% respectively for those\nwhose parents are on the lowest rung.<\/p>\n<\/div>\n\n

\n

This means that\nnot only are there differences by age, with the younger group benefiting more,\nbut also by differences in parental wealth, which delivers a significant\nbenefit. However, with \u2018levelling-up\u2019 an unequal UK, high on our cash-strapped\ngovernment\u2019s agenda, IHT is a likely candidate for reforms \u2013 and that could hit\nwealthier families hard. It\u2019s best to prepare for a range of scenarios and take\nprofessional advice for the best financial strategy.<\/p>\n<\/div>\n\n

\n

1<\/sup>gov.uk, 2018<\/p>\n<\/div>\n\n

\n

2<\/sup>gov.uk, 2019<\/p>\n<\/div>\n\n

\n

The value\nof investments and income from them may go down. You may not get back the\noriginal amount invested. A pension is a long-term investment. The fund value\nmay fluctuate and can go down. Your eventual income may depend on the size of\nthe fund at retirement, future interest rates and tax legislation. Inheritance\nTax Planning is not regulated by the Financial Conduct Authority.<\/em><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

It\u2019s been three years since then-Chancellor Philip Hammond asked the Office of Tax Simplification to look into potential amendments to the Inheritance Tax (IHT) regime1. Since then, no changes have been made to the tax incurred when wealth passes onto the next generation; could Rishi Sunak be the one to take up the mantle once […]<\/p>\n","protected":false},"author":12,"featured_media":1609,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,89,88,90],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/1608"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=1608"}],"version-history":[{"count":1,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/1608\/revisions"}],"predecessor-version":[{"id":1610,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/1608\/revisions\/1610"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/1609"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=1608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=1608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=1608"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=1608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}