Inheritance tax alert as Britons ‘don’t realise’ they’ll be hit by Sunak’s ‘stealth tax’

Inheritance tax: Financial advisor provides advice

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The decision by Chancellor Rishi Sunak to freeze inheritance tax allowances until 2026 may have major implications. Most of all, it could mean many people who haven’t previously considered IHT will have to cough up funds to the taxman.

Express.co.uk spoke exclusively to Elaine Roche, Board Member at Solicitors for the Elderly, who explained why more people are getting caught in the net.

She said: “Inheritance tax receipts just go up non-stop. The nil-rate band – the amount you can pass tax-free – has not gone up for 12 or 13 years. 

“And yet, if you think that if you’ve owned a house for that time, the price would have soared.

“When the Budget was announced, and the Chancellor said it would be frozen – it is a stealth tax.

“Everything is staying the same, but the value of your assets is just going up and up.”

Ms Roche explained that many people found themselves accruing more money during the pandemic as a result of a lack of spending.

However, this “threw” people into the net of inheritance tax, without them necessarily taking any action. 

She added: “More and more people are subject to the tax, and more people are subject to more tax because asset values are rising and reliefs are not. It’s a big concern because receipts are rising at quite a large level.”

DON’T MISS
State pension warning as retirement age may rise to 70 [ANALYSIS]
State pension for married women set to increase this year [INSIGHT]
Pension alert as Britons forced to wait an extra two years for cash [UPDATE]

Frustration still lingers among Britons who feel as if they are being taxed multiple times.

Wealth in many cases has already been taxed as income. For properties, this may involve stamp duty, while for income, income tax and capital gains tax could be brought into the equation.

Many will have to also reckon with the idea of inheritance tax on their money when they pass away.

This is an issue which is affecting increasing numbers of people, Ms Roche added.

She continued: “Inheritance tax is being viewed less as a wealth tax now. For example, certainly in the South East, even a small house will get you over the inheritance tax threshold.

“It will be slightly different in some places in the North where perhaps they will never get to that level.

“But even now, there are certain areas in the North where people are well into inheritance tax – even with just a decent sized house.”

“More tax is arguably being paid in the South East than in the North, just because of salaries and property prices and everything else.

“It is not just the wealthy who pay inheritance tax now. Normal, everyday people are paying this tax and being affected by it.”

One does not have to look far for real-life impacts of the Chancellor Rishi Sunak’s policy. 

What is happening where you live? Find out by adding your postcode or visit InYourArea

Ms Roche concluded: “I spoke to one elderly gentleman nearing 90 who had worked and paid taxes in the UK for his entire life.

“Later in life he bought a house in a not-so affluent area, but valuing this with his savings, he was heading closer towards inheritance tax.

“The family never even dreamed they would be remotely close to that given their personal circumstances.

“It’s the people who don’t even realise they are heading towards it that can be a problem.

“That’s why it can be so important to take advice, as otherwise, people could miss the vital allowances necessary to prevent them paying thousands.”

Source: Read Full Article