50,000 Britons dragged into paying ‘unfair’ inheritance tax

Taxpayers are slamming inheritance tax (IHT) as “unfair” following the revelation that fifty,000 Britons are being pressured to pay the levy.

A current report, obtained by the Telegraph, has revealed the variety of folks being dragged into the IHT threshold is 4 occasions greater than beforehand forecast.

Chancellor Jeremy Hunt made the choice to freeze the inheritance tax threshold at £325,000 till April 2028.

Previously, it was estimated that this transfer would pull 13,400 estates into the levy’s purview however higher-than-expected inflation has seen this determine rise to nearly 50,000.

In a recent survey carried out by Ipsos, IHT was ranked as probably the most “unfair” tax at the moment within the UK.

Some 43 p.c of respondents agreed the levy was “unfair” to taxpayers, in comparison with 23 p.c and 17 p.c who believed it was honest.

Other levies that are thought-about “unfair” by a plurality of Britons embrace council tax and gasoline obligation.

This specific tax is imposed on somebody’s property, which incorporates their property and possessions, after they’ve handed away.

No inheritance tax is paid if the one that had died away leaves every little thing above the allowance to their partner, civil companion, a charity or a group newbie sports activities membership.

An estimated 280,000 households throughout the nation are anticipated to pay extra in IHT payments by the top of Hunt’s tax threshold freeze.

Inheritance tax is often not paid by taxpayers if the worth of the deceased’s property is below the £325,000 allowance.

However, a regular tax price of 40 p.c is utilized to something that’s above this specific threshold.

Usually, IHT thresholds rise according to inflation however the present allowance stays the identical because it did in 2021.

With the inheritance tax threshold remaining the identical, rising home costs and asset progress imply that increasingly more households are having to cope with this tax greater than earlier than.

Ian Dyall, the top of Estate Planning at wealth administration agency Evelyn Partners, cited the general public outrage over IHT probably being a political sizzling potato subsequent yr.

He defined: “Inheritance tax has grabbed some headlines recently with the possibility that it will become a policy issue at the next General Election.

“Given the steadily rising tide of IHT receipts taken by the Treasury, driven in large part by frozen nil-rate band thresholds and rising asset prices, it’s perhaps not surprising that this already unpopular tax is now widely regarded as another ‘stealth tax’.”