Jeremy Hunt is set to announce a new tax raid on inheritance as he battles to balance the books at next week’s Autumn Statement.
The Chancellor and Rishi Sunak are understood to have agreed to freeze the threshold above which people must pay tax for another two years.
It means that more people will have to pay inheritance tax. Others who would already have paid some tax will also have to give a larger chunk of their estate to the Treasury.
Each individual can pass on £325,000 in inheritance tax free, a level which was first set in 2009. A couple can jointly pass on £650,000.
Mr Sunak agreed to freeze that threshold at £325,000 until April 2026 last spring when he was chancellor. Next week the freeze is expected to be extended once again, this time to April 2028.
By keeping the threshold at a fixed point, rather than rising in line with prices, more people’s estates are dragged above the tax threshold. It is a phenomenon known as “fiscal drag”.
A similar approach is due to be widely applied by Mr Hunt, with thresholds or allowances expected to be frozen for income tax, national insurance tax and capital gains tax.
The Telegraph revealed on Saturday that the pension lifetime allowance will also be frozen for a further two years, opening up people to higher tax payments on their lifetime savings.
It is also expected that pensions and benefits will rise in line with inflation.
It is part of a wider strategy by the Government to make sure the wealthiest shoulder the biggest burden of the spending cuts and tax rises coming next week.
The Treasury has estimated that a fiscal black hole of around £60 billion needs to be filled by the Autumn Statement to avoid the Government going into more debt.
Mr Hunt and Mr Sunak held talks on Saturday about the announcements. Major decisions have now been locked in and submitted to the Office of Budget Responsibility.
By freezing inheritance tax thresholds for a further two years the Treasury could rake in as much as a £1bn extra, according to the wealth manager Quilter.
Other calculations based on a lower inflation rate suggest a lower saving for the Treasury.
**Inheritance no longer a tax of the ‘very wealthy’**
The Government introduced a new “transferable main residence nil rate band” of £175,000 in 2017. It applies when a home is left to direct descendants.
In 2009 only 2.7 per cent of estates paid death duties, but in recent years the proportion has remained consistently close to four per cent.
In 2019-20, the latest year for which data exists, 23,000 families paid death duties.
Andrew Tully of Canada Life said: “While inheritance tax has historically been a tax of the very wealthy this is clearly no longer the case.
“With most personal tax allowances including the standard and residence nil rate band frozen until at least April 2026 , this is now a concern for larger sections of society as the inheritance tax net widens.”
Mr Hunt will announce his Autumn Statement decisions to the House of Commons on November 17.
He’s battling to replace money his boss spaffed up the wall. Whatever your thoughts on inheritance tax we should be deeply suspicious of giving this government any more of our money.
They will not use it to improve public services or anything else which might benefit us.
I trust them to build in loopholes that only the truly wealthy will know how to exploit.
OP thinks he’s part of the solution, but he’s part of the problem. Seems to misunderstand the difference between normal people working hard to build some wealth with the truly wealthy avoiding tax across generations.
Just take the vile example of rhys mogg as your benchmark and think is he actually going to pay more tax?
Cos I can tell you the answer is no.
I’m sure this will go down really well with core Tory voters, as will the rumoured scrapping of higher rate pension tax relief, alongside higher mortgage rates, falling property prices and the current tax arrangements causing BTL landlords to lose money.
Are they deliberately trying to lose the next election or something?
Absolutely ridiculous that the threshold is well below the average home cost in London. Families who save up and finally buy a home in London should not be robbed of it and be able to pass it to their children. Like so many other things in this country there should be specific rules for London or high cost areas. Someone in the North could pass on two houses to their kids without any inheritance tax and someone in London can’t even pass on one flat.
So how come charles is skipping inheritance tax this year?
His family has unduly meddled and influenced laws in the UK for long enough.
Time for his tax dodging family to pay their fair share?
A bit late.. could’ve made a canny wedge from the Queen’s inheritance.
Inheritance tax is bullshit and should be scrapped entirely. There’s no reason they should be table to tax money again that’s already been taxed.
I’m not ever going to receive an inheritance and I still am opposed to that tax.
They’ve drained low-income families. They’ve drained middle-income families (which is ~£30k, despite newspapers keeping on suggesting that “middle income” is a salary of 2-3x that!).
And now they’ve left the economy up shit creek, but the bulk of the workforce have little left, Foodbank Britain as we now are. So the drain of the higher-earners begins.
Drain from the bottom up, until there’s just one fat dragon left. That’s the Tory way!
What and odd world tories messing with inheritance tax while labour want I’d cards.
Crazy I tell ya
I mean £325k tax free is a LOT of money.
Median salary is £38k so 8 years gross or 12 years net.
A couple can leave twice that.
And you still get 60% of anything above it
From a selfish point of view… Raid away.
Inheritance gives people such a huge advantage in life and keeps the class system rolling on.
The Duke of Westminster inherited £9 billion and paid essentially no inheritance tax. The assets are held in a trust and this allows him to skip paying.
So even when the wealthiest generation that has ever lived passes away, the millennials who should inherit the wealth will get utterly shafted.
This will not affect the rich who hide their wealth in trusts to avoid this tax. This will target those who have money or assets to hand down to their kids.
Always felt inheritance tax was basically just theft
Income is taxed… purchases are taxed again… then it’s all taxed again if passed on?
Should set up a gofund.me for tax. See if anyone wants to donate.
Good.
The biggest fucking morons I know who are nonetheless rolling in money are in that position purely from inheriting the assets of their parents.
It’s about time we culled the failchildren from the herd.
My dad isn’t happy about this. He understands how much me and my sisters will struggle and wants us to have as much as possible when he does go. He doesn’t want to draw up plans yet as we are currently going through waiting for planning permission. Short version is a land developer approached my dad during covid and after some back and to, they agreed on a price. As far as I can tell it will go through as the council are basically not giving an end date anymore and telling the land developer what to fix in the plans so it can be passed. Once that happens, we have 6 months to move. Idea being we get somewhere similar size which would leave about half a million just from that, my dad has some savings on top but my dad estimated they’d be 300k each. Once the house is sorted, he wants to start giving some of that to us rather than waiting till he passes but according to some research can only give 3k away a year tax free. Yet we see millionaires handing their kids more tax free
**their goal really is to mug middle-class families of their family homes**
Literally the worst kind of tax.
The mega wealthy who this sort of thing should be aimed at rarely ever pay any inheritance tax, meanwhile the working and middle classe get absolutely shafted by it, especially with house prices getting so hefty.
I love how all the lefties in this sub evaporate when inheritance tax gets brought up.
This is shocking especially after the Queen’s death and how they used Parliament to cover up their wealth so the did not have to pay tax on charles inheritance. People save all they’re lives paying tax on everything they earn and pay for only for the children to then be taxed again another 40% on what the parents have already paid and been taxed for . Absolutely disgusting
Inheritance for the middle and working classes*
100% will be ways for the wealthy to retain their inter-generational wealth.
“My kids deserve to never have to work like me because my great great grandparents made a fortune owning factories, we earned it”
Lovely, so you work your entire life, you’re taxed when you earn, spend, and even get a home of your own for your family, then taxed when you die, hell congestion charge is a tax on oxygen (I mean it’s for clean air…)
​
Let me know when we’re taxed on money sitting in the bank and taxed on deposits and withdrawals.
Massive fan of paying more tax on £55k than someone on £150k essentially purely because I’m younger than they are.
Maybe the Telegraph will post my amazing loop hole of having parents with nothing to leave me
Gonna save so much money with it!
So they make that money and pay tax on it as it’s earned all through there life save it up then it gets taxed again before it’s passed on to the remaining family
Nice
What would be the full tax persentage payed on this money if it’s taxed twice
He found some amazing ways to help destroy the NHS and the education system, looks like it’s grieving families this time.
once again millennials will bear the financial burden for the previous generations economic fuck ups. nobody with serious intergenerational wealth will pay a penny of this.
Inheritance tax is a tax on people who don’t trust their children.
You can transfer wealth when your alive, you just have to do it right.
Gotta love that emotional language some newspapers use
“Tax raid”
Why not go all out and just call it “grave robbing”
Inheritance tax needs scrapped although I’m inheriting fuck all it pisses me off
34 comments
Jeremy Hunt is set to announce a new tax raid on inheritance as he battles to balance the books at next week’s Autumn Statement.
The Chancellor and Rishi Sunak are understood to have agreed to freeze the threshold above which people must pay tax for another two years.
It means that more people will have to pay inheritance tax. Others who would already have paid some tax will also have to give a larger chunk of their estate to the Treasury.
Each individual can pass on £325,000 in inheritance tax free, a level which was first set in 2009. A couple can jointly pass on £650,000.
Mr Sunak agreed to freeze that threshold at £325,000 until April 2026 last spring when he was chancellor. Next week the freeze is expected to be extended once again, this time to April 2028.
By keeping the threshold at a fixed point, rather than rising in line with prices, more people’s estates are dragged above the tax threshold. It is a phenomenon known as “fiscal drag”.
A similar approach is due to be widely applied by Mr Hunt, with thresholds or allowances expected to be frozen for income tax, national insurance tax and capital gains tax.
The Telegraph revealed on Saturday that the pension lifetime allowance will also be frozen for a further two years, opening up people to higher tax payments on their lifetime savings.
It is also expected that pensions and benefits will rise in line with inflation.
It is part of a wider strategy by the Government to make sure the wealthiest shoulder the biggest burden of the spending cuts and tax rises coming next week.
The Treasury has estimated that a fiscal black hole of around £60 billion needs to be filled by the Autumn Statement to avoid the Government going into more debt.
Mr Hunt and Mr Sunak held talks on Saturday about the announcements. Major decisions have now been locked in and submitted to the Office of Budget Responsibility.
By freezing inheritance tax thresholds for a further two years the Treasury could rake in as much as a £1bn extra, according to the wealth manager Quilter.
Other calculations based on a lower inflation rate suggest a lower saving for the Treasury.
**Inheritance no longer a tax of the ‘very wealthy’**
The Government introduced a new “transferable main residence nil rate band” of £175,000 in 2017. It applies when a home is left to direct descendants.
In 2009 only 2.7 per cent of estates paid death duties, but in recent years the proportion has remained consistently close to four per cent.
In 2019-20, the latest year for which data exists, 23,000 families paid death duties.
Andrew Tully of Canada Life said: “While inheritance tax has historically been a tax of the very wealthy this is clearly no longer the case.
“With most personal tax allowances including the standard and residence nil rate band frozen until at least April 2026 , this is now a concern for larger sections of society as the inheritance tax net widens.”
Mr Hunt will announce his Autumn Statement decisions to the House of Commons on November 17.
He’s battling to replace money his boss spaffed up the wall. Whatever your thoughts on inheritance tax we should be deeply suspicious of giving this government any more of our money.
They will not use it to improve public services or anything else which might benefit us.
I trust them to build in loopholes that only the truly wealthy will know how to exploit.
OP thinks he’s part of the solution, but he’s part of the problem. Seems to misunderstand the difference between normal people working hard to build some wealth with the truly wealthy avoiding tax across generations.
Just take the vile example of rhys mogg as your benchmark and think is he actually going to pay more tax?
Cos I can tell you the answer is no.
I’m sure this will go down really well with core Tory voters, as will the rumoured scrapping of higher rate pension tax relief, alongside higher mortgage rates, falling property prices and the current tax arrangements causing BTL landlords to lose money.
Are they deliberately trying to lose the next election or something?
Absolutely ridiculous that the threshold is well below the average home cost in London. Families who save up and finally buy a home in London should not be robbed of it and be able to pass it to their children. Like so many other things in this country there should be specific rules for London or high cost areas. Someone in the North could pass on two houses to their kids without any inheritance tax and someone in London can’t even pass on one flat.
So how come charles is skipping inheritance tax this year?
His family has unduly meddled and influenced laws in the UK for long enough.
Time for his tax dodging family to pay their fair share?
A bit late.. could’ve made a canny wedge from the Queen’s inheritance.
Inheritance tax is bullshit and should be scrapped entirely. There’s no reason they should be table to tax money again that’s already been taxed.
I’m not ever going to receive an inheritance and I still am opposed to that tax.
They’ve drained low-income families. They’ve drained middle-income families (which is ~£30k, despite newspapers keeping on suggesting that “middle income” is a salary of 2-3x that!).
And now they’ve left the economy up shit creek, but the bulk of the workforce have little left, Foodbank Britain as we now are. So the drain of the higher-earners begins.
Drain from the bottom up, until there’s just one fat dragon left. That’s the Tory way!
What and odd world tories messing with inheritance tax while labour want I’d cards.
Crazy I tell ya
I mean £325k tax free is a LOT of money.
Median salary is £38k so 8 years gross or 12 years net.
A couple can leave twice that.
And you still get 60% of anything above it
From a selfish point of view… Raid away.
Inheritance gives people such a huge advantage in life and keeps the class system rolling on.
The Duke of Westminster inherited £9 billion and paid essentially no inheritance tax. The assets are held in a trust and this allows him to skip paying.
So even when the wealthiest generation that has ever lived passes away, the millennials who should inherit the wealth will get utterly shafted.
This will not affect the rich who hide their wealth in trusts to avoid this tax. This will target those who have money or assets to hand down to their kids.
Always felt inheritance tax was basically just theft
Income is taxed… purchases are taxed again… then it’s all taxed again if passed on?
Should set up a gofund.me for tax. See if anyone wants to donate.
Good.
The biggest fucking morons I know who are nonetheless rolling in money are in that position purely from inheriting the assets of their parents.
It’s about time we culled the failchildren from the herd.
My dad isn’t happy about this. He understands how much me and my sisters will struggle and wants us to have as much as possible when he does go. He doesn’t want to draw up plans yet as we are currently going through waiting for planning permission. Short version is a land developer approached my dad during covid and after some back and to, they agreed on a price. As far as I can tell it will go through as the council are basically not giving an end date anymore and telling the land developer what to fix in the plans so it can be passed. Once that happens, we have 6 months to move. Idea being we get somewhere similar size which would leave about half a million just from that, my dad has some savings on top but my dad estimated they’d be 300k each. Once the house is sorted, he wants to start giving some of that to us rather than waiting till he passes but according to some research can only give 3k away a year tax free. Yet we see millionaires handing their kids more tax free
**their goal really is to mug middle-class families of their family homes**
Literally the worst kind of tax.
The mega wealthy who this sort of thing should be aimed at rarely ever pay any inheritance tax, meanwhile the working and middle classe get absolutely shafted by it, especially with house prices getting so hefty.
I love how all the lefties in this sub evaporate when inheritance tax gets brought up.
This is shocking especially after the Queen’s death and how they used Parliament to cover up their wealth so the did not have to pay tax on charles inheritance. People save all they’re lives paying tax on everything they earn and pay for only for the children to then be taxed again another 40% on what the parents have already paid and been taxed for . Absolutely disgusting
Inheritance for the middle and working classes*
100% will be ways for the wealthy to retain their inter-generational wealth.
“My kids deserve to never have to work like me because my great great grandparents made a fortune owning factories, we earned it”
Lovely, so you work your entire life, you’re taxed when you earn, spend, and even get a home of your own for your family, then taxed when you die, hell congestion charge is a tax on oxygen (I mean it’s for clean air…)
​
Let me know when we’re taxed on money sitting in the bank and taxed on deposits and withdrawals.
Massive fan of paying more tax on £55k than someone on £150k essentially purely because I’m younger than they are.
Maybe the Telegraph will post my amazing loop hole of having parents with nothing to leave me
Gonna save so much money with it!
So they make that money and pay tax on it as it’s earned all through there life save it up then it gets taxed again before it’s passed on to the remaining family
Nice
What would be the full tax persentage payed on this money if it’s taxed twice
He found some amazing ways to help destroy the NHS and the education system, looks like it’s grieving families this time.
once again millennials will bear the financial burden for the previous generations economic fuck ups. nobody with serious intergenerational wealth will pay a penny of this.
Inheritance tax is a tax on people who don’t trust their children.
You can transfer wealth when your alive, you just have to do it right.
Gotta love that emotional language some newspapers use
“Tax raid”
Why not go all out and just call it “grave robbing”
Inheritance tax needs scrapped although I’m inheriting fuck all it pisses me off