Labour is plotting to increase the revenue generated from inheritance tax, commonly cited as Brtian’s most-hated tax, in the upcoming Autumn Budget.
According to a BBC report, Prime Minister Keir Starmer and Chancellor Rachel Reeves are considering several adjustments to the existing tax structure, which includes a variety of exemptions and reliefs.
IHT is currently levied at 40% on estates valued above £325,000. The tax raises approximately £7 billion each year, but it only impacts around 4% of estates.
Despite only affecting a small sum of the population, most Brits consider IHT unfair for its perceived ‘double taxation’ status.
A 2023 YouGov poll showed 61% of Brits disliked the tax. “People work all their lives to save and leave something for their children having already paid tax on it, it's a double hit,” said one respondent.
Potential IHT changes could include stripping away the ‘residence nil-rate band’ that adds an additional £175,000 to the £325,000 nil-band rate for passing on a family home to direct descendants.
There is also a ‘spousal exemption’ that allows assets to be transferred between spouses or civil partners without paying IHT.
Individuals can also currently give away up to £3,000 per year free of inheritance tax.
Reeves is expected to deliver up to £40 billion in additional taxes in the upcoming Budget as she attempts to plug the £22 billion fiscal “black hole” she has accused the former Tory government of leaving behind.