Sajid Javid said there was a “real issue” around Inheritance Tax. Speaking at a Conservative conference fringe event organised by the Institute of Economic Affairs and the Taxpayers’ Alliance, he was asked if he would scrap Inheritance Tax. Responding to the question, the Chancellor said that “sensible reforms” had already been made. He added: “I shouldn’t say too much now but I understand the arguments against that tax.
“You pay taxes already through work or through investments and your capital gains in other taxes, there is a real issue with then asking them, on that income, to pay taxes all over again.
“Sensible changes have already been made but it’s something that’s on my mind.”
Inheritance Tax is a tax which is paid on the estate (such as property, money and possessions) of a deceased person.
The standard Inheritance Tax rate is 40 per cent.
It’s charged on the part of the estate which is above the threshold.
This threshold is currently £325,000, however, some people may have an increased threshold.
If everything above the £325,000 threshold is left to a spouse, civil partner, a charity, or a community amateur sports club, then there is normally no Inheritance Tax to pay.
Dan Garrett, co-founder and CEO of the online will writing service Farewill, commented: “Dying is the only event in our lifetime to incur the most significant financial consequence, with £1 trillion expected to pass between generations over the next decade.
“And yet, for 30 million Brits, it is pushed aside as a conversation for a later date, as it is, quite frankly, too morbid to fully reflect on.
“However, with the current uncertainty on the moving thresholds and figures of Inheritance Tax, it is now essential that we all take the time to assess how to gain transparency and clarity over the cost and processes involved in the passing of loved ones.
“Today, Brits are paying a startling record of £5.4 billion in inheritance tax, and an increasing number of us are being directly affected by the charges”.
According to the survey of 3,000 Britons commissioned by jewellery retailers William May, overall, respondents felt the tax-free threshold should be raised to £679,000 – more than double the current value.
“Luxury possessions like fine jewellery and vintage watches are priceless in terms of sentimental value, and often in terms of physical value too,” said Nick Withington of William May.
“If you’re thinking about investing in a timeless piece, it’s worth planning ahead so it can be passed down (legally) free of Inheritance Tax.”