Inheritance Tax Faces Radical Overhaul

Cross-party group of MPs suggest dropping the headline rate of IHT from 40% to 10% but scrapping many of the lucrative loopholes

James Gard 29 January, 2020 | 11:47AM

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A cross-party group of MPs has recommended radical changes to inheritance tax, which could lead to lower bills for estates caught by IHT. But the proposed shake-up to the nation's most-hated tax would also see the loss of certain loopholes which many people currently use to pass on their wealth. 

Currently, inheritance tax is charged at 40% on an estates once they cross the tax-free threshold of £325,000. The All-parliamentary Group on Inheritance and Intergenerational Fairness (APGG) is proposing slashing this to 10%. But the seven-year rule, a popular method for parents and grandparents to gift substantial sums tax-free to their relatives, could be scrapped.

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James Gard  is content editor for Morningstar.co.uk

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