Rachel Reeves' inheritance tax plans branded "daft" as experts warn grandparents could become "overnight tax evaders"

"All it would achieve is turning grandparents into overnight tax evaders, with cash gifts to children and grandchildren rocketing to avoid what many already see as an unfair tax. At present, with an effective £1m allowance for a married couple with children, most people worry unnecessarily about IHT. But with frozen allowances, more and more families will be dragged into the IHT net in the years ahead."

"At present, individuals can give up to £3,000 a year in gifts tax-free, with additional exemptions for weddings and small gifts of up to £250 per person. Larger transfers can also fall outside IHT if the donor survives for seven years. However, reports indicate that the Treasury is considering capping or tightening these rules as part of efforts to plug gaps in the public finances ahead of the Autumn Budget."

Proposed inheritance tax reforms may target tax-free family gifts, prompting strong opposition from wealth managers and planners. Current allowances include an annual £3,000 gift exemption, wedding and small-gift exemptions up to £250 per person, and a seven-year rule for larger transfers to fall outside IHT. Reports suggest the Treasury is considering capping or tightening these rules to help close fiscal gaps ahead of the Autumn Budget. Advisers warn that tighter rules could push more families into the IHT net, encourage rapid cash transfers to avoid tax, and increase financial pressure on young families who rely on intergenerational support, prompting calls for early planning and professional advice.

Read at Business Matters