Published On: Mon, Oct 7th, 2019

Inheritance Tax ‘particularly unpopular’ says Cabinet Minister – could it be scrapped? | Personal Finance | Finance

The Secretary of State for Housing, Communities and Local Government described Inheritance Tax as “particularly unpopular” because it leaves the elderly paying tax twice – having saved up their whole lives in order to leave assets to children and grandchildren. The Conservative Party politician said it was always “perceived to be unfair”, pointing out that those on higher incomes may be able to find financial loopholes around the tax. Speaking to Sky News, he said: “I can see why the Chancellor is interested in this one.” Mr Jenrick told the Ridge on Sunday show: “It is a tax which is particularly unpopular because people can see the fundamental unfairness of paying tax twice and people are having to leave property that they have saved up their whole lives to leave to their children and grandchildren, to then see them pay additional tax.”

Last week, Chancellor of the Exchequer Sajid Javid appeared to hint he could scrap Inheritance Tax.

It came as he was asked for his thoughts on scrapping the tax, while at a fringe event at the Conservative Party conference.

“I shouldn’t say too much now but I understand the arguments against that tax,” he replied.

“You pay taxes already through work or through investments and your capital gains in other taxes, there is a real issue with then asking them, on that income, to pay taxes all over again.

“Sensible changes have already been made but it’s something that’s on my mind.”

Currently, the Inheritance Tax threshold is usually £325,000.

It may be possible to increase the threshold, such as by giving one’s home to their children or grandchildren.

Another way to increase the Inheritance Tax threshold can be achieved if one person has any unused threshold, and when they die, it can be transferred to a spouse or civil partner.

The standard Inheritance Tax rate is 40 per cent, and this is only applied to the value of an estate above the threshold.

If the deceased has left everything above this threshold to their spouse, civil partner, a charity or a community amateur sports club, then Inheritance Tax there wouldn’t usually be Inheritance Tax to pay.

If the value of an estate does not exceed the threshold, then there is normally no Inheritance Tax to pay.

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