Inheritance Tax Update 2015
Death and Taxes
With the General Election just around the corner and the various parties election campaigns now in full swing, one of the topics that keep cropping up is that of Inheritance Tax and proposed changes to it.
Currently, Inheritance Tax is charged on a persons estate at the rate of 40% on anything above the personal exemption threshold of £325,000.
For married couples, it’s also possible on the death of the second spouse for Executors to apply to transfer over any unused relief from the first spouses’ estate meaning a maximum possible exemption of £650,000.
These rates have remained unchanged since 2009.
So lets now take a look at the main parties 2015 manifesto propositions with regards to any potential changes to Inheritance Tax thresholds.
As part of the Conservative party’s 2010 election manifesto, it was planned that inheritance tax threshold for property and other assets to be increased to one million, although once elected these plans were shelved as part of the coalition agreement with the Liberal Democrats.
Once again as part of their current 2015 election campaign, the Conservatives have pledged to increase the Inheritance Tax threshold to one million.
A recent report in the Telegraph has indicated that Labour does not plan to increase current inheritance Tax thresholds.
As part of their manifesto UKIP have announced their plans to scrap Inheritance Tax altogether.
Like Labour, the Lib Dems have no plans to increase current Inheritance Tax thresholds.
Whilst I haven’t been able to find a definitive statement on Inheritance Tax from the Green Party, the fact that a recent article in the Express entitled “Green Party plans £200 BILLION in tax rises” leads me to safely assume they have no plans to make it easier on a deceased persons estate from a Tax point of view.
From an Estate Planning point of view, out of the five main Parties mentioned above UKIP are the clear leader with their plans to abolish Inheritance Tax altogether, followed by the Conservatives. However, as mentioned above the Conservatives do not have a great track record when it comes to keeping promises.
Once again it is looking like the election results will create the need for some form of coalition to be formed. If this happens it is, of course, possible that any of the above pledges and plans can change as the parties cosy up to one another to secure a deal.
From a personal point of view, I think Inheritance Tax should be abolished altogether, its time to stop taxing the dead.
Abolishing it makes the subject of Estate Planning far simpler for clients to understand, reduces their costs and puts their Mind At Rest with regards to making a Will that ensures their family and loved ones benefit from their hard-earned assets in full.
After all, we all pay too much Tax whilst we are alive.
Past Inheritance Tax Blog Posts