Chancellor hints at inheritance tax reform

Chancellor Sajid Javid has said there is a “real issue” with inheritance tax, and inferred that a change to the rules could be on the cards.

Speaking at a Conservative party conference event this week, Javid revealed that the current inheritance tax system was “something that’s on my mind”.

Estates in the UK worth more than £325,000 are liable for inheritance tax at 40%, except when the deceased leaves everything above that threshold to their spouse.

When asked whether he would consider abolishing inheritance tax, the Chancellor said that “sensible reforms” had already been made, but acknowledged that he “understood the arguments against that tax”.

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

The latest statistics from HMRC show that around 28,000 – or 5% – of deaths in the UK result in inheritance tax charges, which raised a total of £5.4 billion for the Treasury last year.

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