The Chancellor, Philip Hammond has requested that the Office of Tax Simplification reviews Inheritance Tax and describes the tax as particularly complex.
Increasing house prices have meant that many people are now struggling to get on the property ladder as they are unable to fund the deposit.
Some help has been given by recent changes to Inheritance tax which have introduced additional relief for those passing on their main home to their children or grandchildren.
However, the annual amount an individual can give away each tax year without Inheritance Tax implications has remained static at £3,000 since 1981.
In 1981 this could have been sufficient to fund a deposit but at today’s prices it would take 7 years of tax free gifts to fund the deposit on the average house.
It has been suggested that this annual tax free limit is one aspect of Inheritance Tax that will form part of the review.
For help and advice on passing on your assets in the most tax efficient way contact us on 01302 320621.
Author: Katy Burgin