Inheritance tax is usually levied on the estate of someone who has died and is passing on their assets, so long as their total estate value is over £325,000. Where IHT is due, it is usually charged at 40 percent.
Kim Jarvis, a technical manager at Canada Life, commented on the tools launch.
Ms Jarvis said: “IHT is by its very nature a complex area of financial planning, but this tool should prove valuable to those who are unfamiliar with the process and the forms requiring completion.
“Although HMRC has been clear the tool should only be used as guidance, it will helpfully show if the estate will need to pay IHT.
“The tool is not a calculator and clearly doesn’t replace good financial planning or the role of advice, but it is a welcome development by HMRC.”
“Instead, our first step is to freeze personal tax thresholds. We’ve nearly doubled the income tax personal allowance over the last decade, making it the most generous of any G20 country.
“We will of course deliver our promise to increase it again next year to £12,570, but we will then keep it at this more generous level until April 2026.
“The Higher Rate threshold will similarly be increased next year, to £50,270, and will then also remain at that level for the same period.
“Nobody’s take home pay will be less than it is now, as a result of this policy. But I want to be clear with all members that this policy does remove the incremental benefit created had thresholds continued to increase with inflation.
“We are not hiding it, I am here, explaining it to the House and it is in the Budget document in black and white. It is a tax policy that is progressive and fair.
“And, I will also maintain, at their current levels, until April 2026:
- The inheritance tax thresholds.
- The pensions lifetime allowance.
- The annual exempt amount in capital gains tax.
“And, for two years from April 2022, the VAT registration threshold which, at £85,000, will remain more than twice as generous as the EU and OECD averages.”