The British government is reportedly looking at raising inheritance tax in an attempt to counter the country’s spending shortfall. Although the extent of the hike is not yet known, currently 4% of deaths are subjected to inheritance tax, which stands at 40% on properties, possessions and cash worth more than £325,000 ($428,000). The tax generates £7bn a year for the government and is currently subject to several exemptions, including Business Relief for Inheritance Tax, which allows land used for cattle and farming to be free of Inheritance Tax, but the“prime minister and the chancellor are considering multiple changes” to these, according to BBC sources.
It is not clear how much more individuals would have to pay in the event of a tax increase. Treasury officials have indicated they do not comment until after fiscal events, and on 30 October, Chancellor Philip Hammond is expected to announce the proposed changes in what’s being billed as the government’s “Fixing the Foundations to Deliver Change” Budget.
Even though there is uncertainty over how far-reaching the budget will be, there are already discussions in the public domain about raising money to address an alleged £40bn shortfall between what the government wants to spend and the amount of tax it is predicted to collect. Ministers are said to be keen to address the deficit and “reset public finances”.
Though it is widely anticipated that some form of increase in National Insurance contributions will be put in place for employers to raise further revenue, the Labour manifesto pledged not to increase taxes for the average working taxpayer in parliament’s lower house. It’s been suggested the Conservatives will seek to bypass this promise by shifting the tax on to employers themselves.
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