The government is planning to increase the amount of money it raises in inheritance tax at the Budget, with significant adjustments being considered by ministers. Current exemptions and reliefs may change, as the government seeks to address a £40 billion shortfall between planned expenditure and collected taxes.
Inheritance tax is levied at a 40% rate on estates exceeding the £325,000 threshold. Presently, it accounts for £7 billion annually, affecting around 4% of deaths.
The upcoming Budget aims to reset public finances, with ministers emphasizing the need for significant change to handle the fiscal challenge. Exemptions like Business Relief and Agricultural Relief may face scrutiny as part of these reforms.
As is common, new governments often raise taxes after elections. The Budget is framed as an opportunity to 'Fix the Foundations to Deliver Change'.
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