Possible Tax Reforms – After the Budget
5 March 2021 by James Bird
It has now been a couple of days since the budget was announced and there certainly was a lot to digest. With the main focus being the extension of the Stamp Duty holiday and changes to corporate taxation, not much tended to change in respect of inheritance tax.
There were rumours flying around before the budget about possible changes to taxes on lifetime gifts but this never appears to have come to fruition.
In respect of inheritance tax, these allowances and rates remain the same, namely:
- The Nil Rate Band (NRB) will remain at its current level of £325,000 and this will be frozen until April 2026.
- The Residence Nil Rate Band (RNRB) will remain at its current level of up to £175,000 (dependant on meeting certain criteria) and this will be frozen until April 2026 as well.
With capital gains tax, this remains at the same levels for individual and personal representatives (£12,300) and at the same rate for trustees for most types of trust as well (£6,150).
Although there has not been any change in respect of the tax allowances that might be considered when carrying out estate planning, it is still important that you regularly review your finances and your circumstances. This can mean not only taking financial advice about lifetime taxes but also taking legal advice and reviewing your Will to ensure that your wishes are still accurate and also that they are being undertaken in a tax-efficient manner.
If you have any questions about estate planning or wish to take part in our free Wills campaign then please do not hesitate to contact our Wills, Life Planning & Probate team; call 01206 700113, or email [email protected].