Chancellor George Osborne recently announced the Autumn Statement for the UK and the issue of inheritance tax (IHT) – perhaps unsurprisingly – featured fairly heavily. We came across a couple of articles discussing the changes to IHT that caught our eye.
The first is from the FT Advisor regarding IHT exemptions. Under new legislation to be introduced by Osborne, IHT exemptions will be extended to apply to all decorations and medals awarded to the armed services or emergency services personnel, and also to awards made by the Crown for recognised achievements in public life. Existing IHT exemptions will also be extended for members of the armed forces whose death is caused or quickened by injury when on active service to also include members of the emergency services or humanitarian aid workers; Osborne himself stated IHT has been extended "to cover our aid workers who lose their lives in dealing with humanitarian emergencies."
The second article that we found interesting is from the UK Fundraising website regarding changes to IHT thresholds and how it will affect charitable donations made after death. According to the article, the proposed changes to IHT in extending the nil-rate band from £325,000 to £1 million could put many people off leaving money to charity in their will. Under current laws, a £325,000 estate is subject to IHT after death; however, donations made to charity during an individual's lifetime or in their Will are exempt from IHT. Also, if an individual leaves 10% or more of their estate to a charity, any IHT due can be paid at a reduced rate of 36% as opposed to 40%. The charities most likely to be affected are: Cancer Research UK; RNLI; RSPCA; Macmillan Cancer Support; and The National Trust.
Have you come across any other interesting articles regarding how the Autumn Statement will affect IHT?