Sunak's IHT removal rumour sparks cautious optimism

investmentweek.co.uk:

Rishi Sunak

The PM is expected to frame the policy as an «aspirational offer to voters» ahead of the general election, according to TheSunday Times. Sunak's officials have label IHT as «the most hated tax in Britain».

Despite the report, Sunak today (25 September) refused to comment on speculation that he is looking to abolish IHT next year. The Times reported the PM has not denied that he is considering slashing IHT or removing it altogether.

Autumn Statement set for 22 November 2023

Sunak said he would «never comment» on tax speculation and argued that «the most important tax» he can deliver is to «halve inflation».

IHT receipts increased by £300m year-on-year to £3.2bn in the five months from April to August, according to the latest data released last week (21 September) by HM Revenue & Customs.

According to Evelyn Partners head of estate planning Ian Dyall, a cut to the 40% tax rate would be «welcomed» by many families, particularly as those who have carefully saved and built-up assets will likely have been taxed on much of that wealth already.

«Forty pence in the pound is a comparatively high levy that some feel is a bit punitive. But while it will reduce the impact of IHT on taxable estates, it will not remedy the trend of more and more families being drawn into the net of IHT,» he said.

«IHT is starting to impact increasing numbers of relatively modest estates, and as inflation means property and other asset prices tend to rise in the long term, more families — and more of each family's savings — will be driven over the IHT threshold. So, possibly more welcome would be a hike in the nil-rate band.»

Dyall added that the issue with ongoing speculation around the abolition of IHT is that «it could encourage a false