“IHT seems to arouse very strong emotions in many people, whether for or against, and is polarized on whether they want to increase the tax rate or abolish the tax altogether. We suspect that given recent government problems and the need to calm money markets, abolishing a tax that hits rich more than poor will be far on the new prime minister`s agenda, and small changes are more likely. The changes coming in January 2022 are welcomed by all those responsible for administering an estate, but this is clearly only the first step, as there is much more to come. The government acknowledged that it had not fully accepted the OTS`s recommendations. A letter from the Ministry of Finance to the OTS confirmed that the government would continue to work on digitisation and a “longer-term” overhaul of the tax administration. “Our children and grandchildren will never be able to buy their own properties because the cost of living is very high. This will result in grieving families paying a total of £1 billion more in IHT in 2026-27 and 2027-28, according to calculations by asset manager Quilter. Far from abolishing inheritance tax, the Conservatives are expected to increase it in addition to the new simplification of reporting, which will come into force from January 2022, HMRC has also defined the definitions of spouse and life partner. Until this orientation, there was no definition of spouse and life partner in IHT, so the general legal definition was used. In addition, physical signatures on an IHT statement are no longer required for matters related to the estate or trust. This change was introduced as a temporary measure due to the global pandemic, but will be permanent from January 2022. If you do nothing, you`ll automatically sign up for our premium digital monthly subscription and retain full access for $69 per month.
Former Chancellor Kwasi Kwarteng announced in the recent “mini” budget that this office would cease to exist and that the government would take responsibility for tax simplification, which begs the question: will the IHT be reviewed soon? The Prime Minister has already indicated that she wants to reform the IHT. Alex Davies of the Wealth Club said: “The freezing of the estate tax threshold for another two years – until 2027-2028 – is a secret tax increase. It won`t appear on a list of tax increases, but it won`t be long before its effects are felt by unsuspecting families. And it won`t just be the super-rich. It will be the thousands of hard-working families caught in the crosshairs of high housing prices and the freeze on IHT benefits. Large estates consisting mainly of farms and commercial properties will pay more tax than they currently do – an example in the report shows how an estate worth around £6.650 million with mainly qualified assets would pay no tax under the current regime, but under the proposed new regime would pay £1 million paid in installments over ten years. But, as the report points out, a haircut of equal value, where the assets consist of an investment portfolio that is not eligible for relief, pays a tax of GBP 2.4 million under the current scheme and would pay GBP 1 million under the proposed new scheme. He also raised the prospect of abolishing inheritance tax: “In my opinion, inheritance tax is deeply unpopular – better described as a death tax. I would be terribly excited if the government were to look at this issue again, especially in economic terms, because it means keeping capital in its own country. As of January 2022, there will no longer be mandatory reporting requirements for estates that fall below the IHT threshold. This means that if the estate is less than £325.00, executors will no longer need to file IHT documents. Angry Britons took to social media to complain about the inheritance tax, which they thought would be abolished.
Although the report did not go so far as to recommend the total abolition of inheritance tax, as other countries have done  or to provide for allowances so generous that only the most valuable estates are taken , it contributes significantly to the simplification of the current UK system and should be widely welcomed. When a person dies, the executors or administrators of their estate must complete the appropriate declarations for IHT. “There are even solutions that allow beneficiaries to access their inheritance more quickly through an advance on inheritance.” Speaking at a Centre for Policy Studies event at the Conservative Party conference, Griffith said: “I shouldn`t talk about tax policy.