Could we see the back of inheritance tax? - Pembroke Financial IFA's

Could We See the Back of Inheritance Tax?

Widely regarded as the most unpopular tax, IHT is under scrutiny from both government and opposition. Is it time it was scrapped for a gifts tax? A paper presented to the Labour Party has suggested the abolition of inheritance tax (IHT). Labour Party proposals to kill off inheritance tax (IHT) and replace it with a gifts tax were reported across several newspapers last month. The coverage was somewhat creative given that the idea was plucked from a paper prepared for the Labour Party primarily focused on reforming the taxation of land. The gifts tax section covered just half a page and did little more than regurgitate a structure proposed over a year ago by the Institute for Public Policy Research (IPPR).

How well do you understand inheritance tax? - Pembroke Financial IFA's

How well do you understand inheritance tax?

Only one in four respondents to an HMRC survey completely understood how the inheritance tax (IHT) system could work for them. How would you fare? A survey by HMRC of 947 people who had made gifts in the last two years was published in May and concluded that the public have a relatively poor knowledge of inheritance tax rules and lack of confidence in what they do know. To assess knowledge of the IHT system among these donors, they were asked eight questions, which are shown below…

Inheritance tax reductions ahead of potential reform - Pembroke Financial

Inheritance tax reductions ahead of potential reform

Future increases to the residence nil rate band might be in question, thanks to the OTS review of inheritance tax. Inheritance tax (IHT) will be slightly reduced for some from 6 April 2019, but greater reforms may well arrive soon. The reduction comes from the IHT residence nil rate band (RNRB) increasing by £25,000, bringing it to £150,000 for the 2019/20 tax year. In theory that means a married couple can pass on up to £950,000 (2 x nil rate band of £325,000 + 2 x RNRB of £150,000) to their heirs free of tax.

Shake up your financial New Year’s resolutions

Shake up your New Year’s resolutions

New year, new resolutions to break? Try our four financial resolutions with long term benefits. Have your New Year resolutions fallen by the wayside already? You know, the ones about eating better, drinking less and exercising more. The problem is they all require you to make a change to your lifestyle, which is never easy, particularly in the dark days of mid-winter….

Unmarried couples lack the rights of married couples

Unmarried couples lack the rights of married couples

Two recent events have shone different lights on the government’s view of unmarried couples. As the graph shows, marriage has been drifting out of fashion for close to 50 years. There are now over 3.3 million unmarried couples in the UK, of which nearly half have children. In spite of this major social change, governments have largely maintained sharp legislative distinctions between the married and unmarried. When they have conflated the two, it is usually to swell the Exchequer’s coffers, for example when applying the high income child benefit charge to unmarried couples with children….

HMRC spotlights IHT returns as a new case shows risks of late planning

HMRC spotlights IHT returns as a new case shows risks of late planning

Imagine you are named as the executor and a beneficiary of your wife’s wealthy aunt. You learn that she is suffering from terminal cancer and has ‘a very impaired lifespan’. What do you do? This is what happened in the case of Nader and others v Revenue & Customs. The executor/beneficiary, a Dr Nader, decided to consult a leading firm of accountants about inheritance tax (IHT) mitigation options for Miss Dickins (the aunt). The accountants put forward an offshore trust-based scheme….

Record inheritance tax revenues ahead of simplification review

Record inheritance tax revenues ahead of simplification review

As inheritance tax (IHT) receipts hit a record for the Treasury, is it time to review your estate planning ahead of any changes in the Budget? 2017/18 produced record IHT receipts according to HMRC data published in July. The latest release of the annual statistics revealed IHT produced £5.228 billion for the Exchequer in 2017/18. That’s an increase of two thirds over just five years and, as the graph below shows, IHT revenue has been rising rapidly since Treasury receipts hit a low in 2009/10, owing to the combined impacts of the financial crisis and the introduction of the transferable nil rate band…