The inheritance tax (IHT) debate is heating up, with rumours swirling about potential increases or decreases almost daily.
These rumours have been fuelled by Prime Minister Rishi Sunak’s recent vagueness, in which he did not rule out the prospect of an IHT cut. Will the government be more inclined toward an increase or a decrease?
There is a lot of confusion in the history of IHT. Ever since it was first introduced in March 1986 to replace the capital transfer tax, there has been discussion about its possible development or even elimination.
The challenge the administration has is striking a balance between the public’s aversion to these levies and the indisputable necessity for funding. Complicating issues are factors such as an aging population and the economic consequences of the Covid epidemic. The way forward involves sound financial management as much as popularity.
Since April 2009, the IHT’s nil rate band (NRB) has remained at £325,000, and this trend is anticipated to continue until April 2028. The number of families impacted by the tax is increased by this freeze.