Early estimates indicate that only 12,500 families would benefit from a cut in the rate of inheritance tax (IHT) despite rumours that the Chancellor is considering reviewing the 40% tax rate, showed analysis by Quilter.

Talk of raising the inheritance tax threshold to £500,000 and removing the residence nil rate band (RNRB) at the Autumn Statement would cost the Treasury on average £1.4bn per year. In the 2020-21 tax year, 27,000 estates paid IHT but it is a significant earner for the Exchequer, raising £7.5bn in the last tax year, up 17% on the previous year, with estimates that it will exceed £9bn by 2028.

The current IHT rate is 40% for assets worth more than £325,000 for a single person and £650,000 for couples. If the government were to cut this to 30% it would cost nearly £2bn a year, while halving the rate to 20% would result in an eye watering hit of £3.75bn.

T