With the newly elected government likely to bring a very different approach to managing the UK’s finances, Cheshire-based savers and people approaching retirement may be left wondering what that means for inheritance tax planning.
If economic growth does not materialise as anticipated, the Treasury may decide to raise funds by increasing inheritance tax receipts.
While recognising that there are legitimate reasons for setting up an offshore trust structure, Labour’s 2024 manifesto committed to ending the use of offshore trusts for inheritance tax avoidance, particularly the protection of assets from tax. While the previous government had already reduced those benefits for “non-doms” (non-domiciled residents), they are still widely used, and there may be further regulations introduced to reduce or end these trusts.
There is speculation that agricultural relief and business relief may be abolished or capped at £500,000 per person, above which point it might be charged at 40%. This opens up the possibility that estates will terminate the business and sell off the assets, leading to additional fees and tax liabilities. As a result, family business owners are starting to consider options for minimising the tax impact of a business relief cap.
Probate may also see reform with the introduction of electronic or video wills, which would be unlikely to affect inheritance tax, but might make the process easier.
When considering options for estate and tax planning, it is important that business owners pause to consider their financial decisions. For peace of mind, call Hartey Wealth Management for unbiased financial advice in Cheshire today.
