Budget 2015: Inheritance tax threshold to rise

clock

Leaked documents from the upcoming 2015 Budget have shown that the threshold for inheritance tax (IHT) is set to rise for the first time since 2009.

The documents, seen by the guardian, showed that the increase would put the IHT threshold up to £1m.

Insurers have been rolling out products aimed at making it easier to administer trusts for life insurance payouts, which avoid the money being counted as part of the inheritance and taxed at 40%.

Legal & General launched an online hub to administer trusts, while Aegon launched a whole of life product with an integrated trust option.

Currently the rate of IHT is £325,000 and £650,000 for married couples.

Rachael Griffin, financial planning expert, Old Mutual Wealth: "The proposed rise in the IHT level is a welcomed move. The IHT band was frozen at £325,000 back in April 2009.

"Since then, average house prices have risen by 20.3%, making the current IHT threshold vastly out of date with current property prices, leading to more families being caught by IHT.

"If IHT had kept pace with house price inflation, the £650,000 joint IHT allowance would stand at £781,950* today, so this proposed move to £1m would be a progressive move.

"The full details of the proposal are yet to be thought through, but having a separate property IHT exemption could make estate planning more confusing."

More on Whole of Life

Royal London extends online trusts to WOL

Royal London extends online trusts to WOL

New discretionary trust form includes cohabitees

Cameron Roberts
clock 11 March 2024 • 1 min read
Vitality: Unemployment biggest driver for cancelled life insurance

Vitality: Unemployment biggest driver for cancelled life insurance

Financial pressures still front of mind

Laura Miller
clock 28 November 2023 • 2 min read
Timpson warns of dangers associated with joint life policies

Timpson warns of dangers associated with joint life policies

Can contribute to economic and domestic abuse

Hemma Visavadia
clock 02 December 2022 • 2 min read

Highlights

COVER Survey: Advisers damning of protection insurer service levels

COVER Survey: Advisers damning of protection insurer service levels

"It takes longer than ever to get underwriting terms"

John Brazier
clock 12 October 2023 • 5 min read
Online reviews trump price for young people selecting life and health cover

Online reviews trump price for young people selecting life and health cover

According to latest ReMark report

John Brazier
clock 11 October 2023 • 2 min read
ABI members with staff neurodiversity policy nearly doubles

ABI members with staff neurodiversity policy nearly doubles

Women within executive teams have grown to 32%

Jaskeet Briah
clock 10 October 2023 • 3 min read