Inheritance tax threshold frozen and tax planning in spotlight
While the newspapers were predicting changes to inheritance tax, Rishi Sunak restricted himself to simply freezing the current threshold at which inheritance tax is payable until 2026.
The Spring Statement also included proposals for tackling ‘promoters of tax avoidance’, along with a promise that legitimate professionals such as solicitors have nothing to fear.
The announcement follows a consultation by HM Treasury on ‘Tackling Promoters of Tax Avoidance’. The Chancellor has set out a package of measures to strengthen existing anti-avoidance regimes and tighten the rules designed to tackle promoters and enablers of tax avoidance schemes.
According to Stephen Myers, a wills and probate solicitor with Myers & Co in Burslem specialises in advising private clients on estate and inheritance planning:
‘Clients often wonder if inheritance tax planning is ‘tax avoidance’ and whether it might be illegal. But we all have a right to minimise our tax bill, as long as we do so within the law. There are a variety of options including the tax-free gift, the use of trusts and various reliefs.’
The rules around inheritance tax and other tax reliefs are complex and it is important to seek advice from a regulated professional. Myers & Co Solicitors in Stoke-on-Trent is regulated by the Solicitors Regulation Authority, which means that the firm and its employees must abide to a strict code of conduct. Professional advisers are properly trained – for example, solicitor Susan Hall is also qualified with STEP (the Society of Trust and Estate Practitioners), and clients are protected by insurance.
Fortunately, the Treasury consultation identified that promoters of tax avoidance schemes are ‘rarely members of professional bodies.’ If you have been offered a tax-reducing investment by someone who is not your usual solicitor, accountant, or financial adviser, then it is important to check if they are regulated and what protection will be available to you.
If you are thinking about your potential inheritance liability and whether it may be too high, then our private client team can advise you on which tax reliefs may be available and what you can do to ensure that you do not pay any unnecessary inheritance tax-and all within the rules.
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This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.