Private clients: The mini-Budget and Autumn Statement
Over the last few months it has been difficult to know what the taxation position in 2023/24 will be for many private clients as we have ricocheted from abolition of the additional rate of income tax to its retention with a lowered threshold, and from a cut in basic rate income tax to the freezing of income tax thresholds for some years to come.
One thing that is clear is that an increasing proportion of clients will be brought into the charge to inheritance tax (IHT) with the freezing of the nil rate band and residential nil rate band (RNRB) until 2028 which means that asset values will have had 19 years of gains with no increase in the nil rate band. IHT planning will become increasingly important for those with the ability to make lifetime gifts. The forthcoming reduction over the next two tax years of the capital gains tax annual exemption to £3000 per annum will make capital gifts more expensive, although relevant property trusts can help here with the ability to hold over capital gains on inception. Gifts out of income may be a possibility for others, although in deciding amounts to be given the seemingly relentless rise in the cost of living should be factored in.
It is important to ensure that the complicated provisions of the RNRB are complied with. This should happen both at the Will drafting stage but also following a death as action may be required at that stage to ensure the maximum amount of RNRB is available.
Regular reviews of your clients’ Wills and IHT positions are important as many clients, who did not expect to pay IHT, will be brought within its net in the coming years.
Contact a specialist Wills and inheritance tax solicitor
For Wills or inheritance tax advice contact one of our expert solicitors on 0800 652 8025 or contact us online. Your initial consultation is free. Our specialist solicitors are based in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton and are ready to discuss your case.