Speculation is intensifying around potential changes to inheritance tax (IHT) in next week’s budget with intentions to address loopholes benefitting the wealthy.
The average rate actually paid by those affected by IHT in the 2021-22 tax year was only 13%, despite a headline rate of 40%.
The main IHT threshold has been frozen at £325,000 since 2009, pulling more individuals into the tax net due to rising asset values.
In 2023-24, inheritance tax generated a record £7.5 billion, reflecting ongoing fiscal drag as property and asset values continue to rise.
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