Consideration of changes to inheritance tax in the United Kingdom

• The government plans to review the rules on inheritance tax in the United Kingdom.
• They are considering the introduction of a general exemption for gifts and changes to the rules regarding exemptions.
• Currently, only about 4% of estates are subject to inheritance tax due to existing exemptions.

In the United Kingdom, the government is considering the possibility of changing the rules on inheritance tax (IHT). According to information, officials indicate intentions to increase revenue from this tax, which may include a review of the rules on gift exemptions.

One of the proposals includes the introduction of a general exemption for gifts, depending on how much can be given as a gift during a person's lifetime without incurring tax. Currently, the inheritance tax rate on estates stands at 40% on properties valued over £325,000. It is noted that only about 4% of estates are subject to tax due to existing exemptions.

In addition, there are plans to review rules related to "taper relief," which allows for a gradual reduction of the tax rate based on the time elapsed since the moment of gifting.

Changes are being considered against the backdrop of financial constraints, with reports indicating a budget deficit of £50 billion. The government needs to find new revenue sources, and the inheritance tax on estates may be one of them.

Currently, given the rising value of real estate and assets, many individuals are starting to gift assets during their lifetime to avoid high tax rates.

Tags: Europe/Economy