Chancellor Hunt Considers Inheritance Tax to Fill Fiscal Hole

Picture of Written by: Liez Comendador
Written by: Liez Comendador
Chancellor Hunt Considers Inheritance Tax to Fill Fiscal Hole

Highlight the text in the article to activate the speech reader function.

When announcing the UK government’s spending plans, Chancellor of the Exchequer Jeremy Hunt is considering obtaining extra revenue from inheritance tax to plug a £35 billion ($40 billion) fiscal hole.

Since 2009, the nil rate has been fixed at £325,000, and it was supposed to stay there until 2025–2026.According to reports, Hunt is considering extending the freeze until 2027–2028, which would bring in at least £500 million.

Since the high rate of inflation, freezes in the tax-free limits result in higher taxes overall. The Treasury has locked the income and capital gains tax thresholds until 2025 or 2026. The individual stated that these freezes could be prolonged, bringing in billions more than they would have otherwise.

Chancellor Hunt Considers Inheritance Tax to Fill Fiscal Hole

The person noted that it has not yet been discussed whether to subject banks to a higher effective tax rate. Hunt has considered lowering the ‘bank surcharge’ from 8% to 3 %.Next April’s increase in corporation tax to 25% would result in banks paying an effective tax rate of 28% rather than the current 27%. The effective tax rate for banks would be 33% if the surcharge remained 8%.

Hunt intends to increase the state’s tax take by billions of pounds through the back door by maintaining tax-free levels at the same level for various levies, including those on income, pensions, and capital gains.

Traditional Tory voters would be affected by the change, but Hunt and Prime Minister Rishi Sunak have argued that people with “the broadest shoulders” must pay more.

References

Wickham, Alex. 2022. ‘UK Chancellor Hunt Eyes Inheritance Tax to Fill Fiscal Hole’, Bloomberg.com (Bloomberg): https://www.bloomberg.com/news/articles/2022-11-07/uk-chancellor-hunt-eyes-inheritance-tax-to-address-fiscal-hole#xj4y7vzkg

Thomas, Daniel, John Paul Rathbone, Laura Noonan, and Jim Pickard. 2022. ‘Jeremy Hunt Plans Stealth Raid on UK Inheritance Tax in Autumn Statement’, @FinancialTimes (Financial Times): https://www.ft.com/jeremy-hunt

Reuters. 2022. ‘UK Chancellor Jeremy Hunt to Announce a Tax Raid on Inheritance -Telegraph’, Reuters (Reuters): https://www.reuters.com/world/uk/uk-chancellor-jeremy-hunt-announce-tax-raid-inheritance-telegraph-2022-11-07/

Author

  • Darren Menzies

    Darren is a Qualified Accountant with a firm belief in integrated teamwork. Darren has leveraging expertise in bookkeeping and business development along with cultural understanding to deliver exceptional and tailored services in accounting, as well as tax, financial advisory and consulting.

    View all posts

Reviewed by:

Leave a Comment

Your email address will not be published. Required fields are marked *

Similar Articles

Long awaited Windfall Tax

Long Awaited Windfall Tax 

You might be wondering what windfall tax is and why it is being imposed in the UK? The answer to this riddle is that a windfall tax is levied against companies deemed to have made excessively high profits, or a ‘windfall’, from circumstances they did not engineer.

Read More »

Our Experts

Picture of Fahad Lateef
Fahad Lateef

Fahad is a Chartered Certified Accountant (ACCA), with a motto “When “why” is clear, “how” is easier”. He is proficient in numeracy and impassioned with giving concise advice to a wide range of clients.

Picture of Junaid Usman
Junaid Usman

Junaid has been instrumental in the achievement of our success across various regions and he specialises in business management, accounting and tax advisory services.

Picture of Faizan Rashid
Faizan Rashid

Faizan is good at providing well-thought-out strategies and solutions to complex problems in Business Development which makes him a proficient overseer of our clients.

The quickest way from A to B is usually a conversation. So, if you want to find out more about how Legend Financial can boost your business, get in touch. We’ll give straight answers so you can make a confident decision, fast.

Most Popular

LET’S DO BUSINESS

The quickest way from A to B is usually a conversation. So, if you want to find out more about how Legend Financial can boost your business, get in touch. We’ll give straight answers so you can make a confident decision, fast.

[ninja_form id=’38’]

LET’S DO BUSINESS

Scroll to Top