A crackdown on underpaid inheritance!
A clampdown on underpaid Inheritance Tax and upcoming changes to pension regulations
HM Revenue and Customs is set to crackdown its efforts against underpaid Inheritance Tax. HMRC are investigating affluent families to determine whether they have failed to pay their fair share, with estimates suggesting a potential shortfall of £325 million. They are particularly focused on identifying miscalculations in estate valuations during the probate process, where the executor assesses the estate's worth for tax purposes.
So, who is subject to Inheritance Tax?
Any estate exceeding £325,000 is liable, with a tax rate of 40% applied to the amount above this threshold. However, families transferring property to direct descendants benefit from an additional exemption of £175,000.
What are the upcoming changes to pensions?
In addition, the Government plans to include pensions in the Inheritance Tax framework, with this change set to take effect in April 2027. Those who have utilised pensions as part of their estate planning should consider reviewing their current strategies ahead of this shift.
Who might be impacted by these developments?
- Affluent individuals and families with estates valued over £325,000.
- Families intending to pass on substantial wealth should stay informed about the evolving regulations.
- Families with large pension funds need to be aware of potential future tax implications.
If you believe that this investigation or the forthcoming pension changes could affect you, Aston Shaw are here to assist you.