What changes have already been proposed?
In 2019, the Office for Tax Simplification (OTS) released a report on IHT which made recommendations for changes that would simplify the rules relating to gifts made during a person’s lifetime. Currently certain gifts, including money and personal goods, can be passed on to family members, which in turn could limit how much IHT is paid down the line.
There are also a number of gifts which will be completely exempt from an IHT calculation.
However, Christine Ross, a Client Director and Head of Private Office at Handelsbanken Wealth and Asset Management, warned some of these gifts could be removed or limited in the coming months.
“There are a number of annual IHT exemptions, such as the £3,000 annual exemption, as well as the ability to gift surplus income, this latter relief being particularly attractive to those with high levels of income,” she said.
“It is possible that these will be wrapped up into a single annual exemption which may be less generous overall.”