Normally, you are not required to pay Inheritance Tax if the value of your estate is below the Nil Rate Band of £325,000 and you leave everything above the threshold to a spouse or civil partner, or if you leave everything above the threshold to an exempt beneficiary such as a charity.
If the value of an estate is above the Nil Rate Band then it will be classed as part of your estate and could be taxed.
The current Inheritance Tax rate is 40 percent. For instance, if an estate is worth £625,000, tax will be charged on the £300,000 above the Nil Rate Band which means tax would 40 percent of this figure – £120,000.
The Chancellor of the Exchequer Rishi Sunak will deliver his Spring Budget on Wednesday, March 3.
Mr Sunak is preparing to announce several new measures designed to boost the UK economy in the wake of the coronavirus crisis.
During 2020, GDP in the UK, which is the value of everything produced in the economy, dropped by 9.9 percent compared to 2019.
The UK suffered the worst financial impact amid the pandemic of any G7 country. So this year’s Budget is expected to be one of the most closely watched in history, particularly in the wake of the pandemic and its huge economic fallout.
Those impacted by Inheritance Tax are eagerly awaiting any possible changes, but what do the experts think will happen?