Inheritance tax is normally levied on the estate of a deceased person who passes on their property as long as the total value of their estate is over £ 325,000. When IHT is due, it is usually charged at 40 percent.
Kim Jarvis, technical manager at Canada Life, commented on the introduction of the tools.
Ms. Jarvis said, “IHT is inherently a complex area of financial planning, but this tool should prove to be of value to those unfamiliar with the process and the forms to fill out.
“Although HMRC has made it clear that the tool should only be used as a guide, it will be helpful to show if the estate is due to pay IHT.
“The tool is not a calculator and clearly does not replace good financial planning or the role of advice, but it is a welcome development by HMRC.”
“Instead, our first step is to freeze personal tax limits. We have almost doubled the personal income tax allowance in the last ten years, making us the most generous of all G20 countries.
“We will of course keep our promise to increase it back to £ 12,570 next year, but we will then keep it at this more generous level through April 2026.
“The threshold for the higher rate will similarly be raised to £ 50,270 next year and will then remain at that level for the same period.
“No one will take home less than they do now because of this policy. But I would like to make it clear to all Members that this policy removes the added value created if the thresholds were raised further with inflation.
“We’re not hiding it, I’m here, explaining it to the house and it’s in black and white in the budget document. It’s a progressive and fair tax policy.
“And I will stay at the current level until April 2026:
- The inheritance tax thresholds.
- The lifelong pension.
- The annual exemption for capital gains tax.
“And for two years from April 2022, the VAT registration threshold of £ 85,000 will remain more than twice as generous as the EU and OECD average.”
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