The Chancellor of the Exchequer, Jeremy Hunt, could extend the inheritance tax Nil Rate Band freeze from 2025-26 to 2027-28 in the Autumn statement on November 17th.  

Hunt is planning to raise £54 billion through tax rises and feels that the extended IHT threshold freeze could contribute to around £500 million for the treasury from grieving families.

Along with the recent inflation increase, by keeping the tax-free thresholds at the same levels, the tax being paid on possible inheritance tax, income tax, capital gains tax and pensions could generate billions of pounds. 

Rishi Sunak originally froze the £325,000 IHT threshold when he was Chancellor until 2026.  An estimated 10,000 families could be pushed over the IHT threshold essentially contributing to the UK’s most hated tax.

As it stands, if your combined estate of properties, investments and shares total £1 million, you can subtract the £325,000 IHT threshold leaving £675,000 which can be taxed at 40%.  The tax needing to be paid would be £270,000, leaving your family with £405,000 and the £325,000 exemption rate.  The total of your estate that your family would inherit upon your passing would be £730,000. 

For more information on Inheritance Tax please click here and please contact Tax Advisory UK to discuss your IHT planning immediately.