The hidden tax hike which will benefit HMRC by an extra £1bn
In the wake of the Covid crisis it had been rumoured for the past two budgets that the chancellor would make changes to inheritance tax – either by amending the nil-rate band or increasing the amount of interest payable on estates.
Neither of these things happened and Rishi Sunak says the nil-rate band is here to stay until at least 2026 – effectively meaning a tax hike, as property prices rise and show no sign of stopping.
The average IHT bill is currently £210k and is set to double over the next five years – that’s an extra £1bn for the tax man on top of the £6bn a year the levy currently generates.
And the Office for Budget Responsibility reported that in 2018/19 IHT was paid on 22,000 estates – a figure that’s likely to rise to 50,000 a year by 2026.
Tower Street Finance’s business development director Dicky Davies says: “We know there are lots of ways that people can mitigate their IHT liability before they pass away, however many people either fail to plan ahead or unfortunately die unexpectedly.
“And when this happens the relatives or professional charged with managing the estate can find themselves surprised by a bill they have to pay within six months. This can slow the probate process down, which is already lengthy. But it doesn’t need to be this way.
“We developed our IHT Loan in conjunction with professionals who see cases like this every day and they helped us come up with an innovative solution to help. We can turn IHT loans around quickly and simply and Tower Street Finance makes the payment directly to HMRC – the loan is then repaid from the estate proceeds.”
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