The Autumn Statement - Key Points from an Inheritance and Tax Planning perspective

1. Inheritance Tax (IHT)

The Nil Rate Band and Residence Nil Rate Band, previously fixed until April 2026, will now be fixed until April 2028.  This is one of a number of 'stealth' taxes extended in this Statement.  The current Nil Rate Band is £325,000 and it has not increased since April 2009 lagging far behind the rate of inflation.  The current Residence Nil Rate Band is £175,000 however this only applies in certain circumstances where a residence is being left to 'direct descendants'.  

If you are concerned about your IHT liability, seek professional advice to ensure you are aware of your allowances and how your estate might be structured to mitigate the same.

2. Capital Gains Tax (CGT)

The annual allowance for CGT is currently £12,300.  From April 2023 this will decease to £6000 with a further decrease to £3000 from April 2024.   If you are planning to make any disposals of capital assets in the next few years, including second properties, investments and shares ensure you seek professional advice and consider whether dealing with the disposal in this tax year would make you a worthwhile saving.

3. Dividends

The tax free allowance for dividends, currently £2000, will decrease to £1000 from April 2023 and then to £500 from April 2024.  If you are a Trustee or an Executor you will need to ensure the income from shares is correctly reported to HM Revenue & Customs.  If you are unsure of your obligations, ensure that you seek professional advice so that you do not risk liability, costs or penalties from HM Revenue & Customs.

GET IN TOUCH

If you need legal advice regarding your Inheritance and Tax Planning, please do not hesitate to contact Claire Clarke on (0)1780 750782, or email claire.clarke@chattertons.com