With less than one in 20 estates liable for inheritance tax, possible tax hikes at the Budget are still creating anxiety, so how can you avoid them
There have been rumours that inheritance tax could be tweaked in the Budget, but no detail will be available before the big day on 30 October.
In the first four months of the new tax year, estates paid £2.8bn in inheritance tax (IHT), £200m more than the same period last year, so there is potential for the Chancellor to tweak the rules and collect an extra billion or so in taxes.
Potential changes could include an increase in the IHT rate from the current base rate of 40% to up to 50%, for example, or a more controversial overhaul of nil rate bands, changes to business property relief and agricultural property relief, and charging capital gains tax on assets at death. Another option would be to make pensions subject to IHT as beneficiaries can collect outstanding pension pots tax free.
