You’ve probably heard about the proposed changes to inheritance tax in the news. They propose to take the 40% inheritance tax rate down to 10%.
It sounds lovely but there’s something else that you should know. At the moment, if you give any wealth away seven years before you pass away, it escapes inheritance tax completely.
The proposed changes are looking to abolish the seven-year rule and instead allow you to give 30,000 pounds away each year, free of inheritance tax. So if someone gives away 2 million pounds worth of wealth seven years before they die, under the new rules they’ll pay 200,000 pounds of inheritance tax when previously, they would’ve paid nothing.
Are they trying to sneak this by us with the sweetener of a 10% tax rate?