It is part of a wider government strategy to ensure the wealthiest bear the brunt of spending cuts and tax rises coming next week. The Treasury has estimated that a fiscal black hole of around £60bn needs to be covered by the Autumn Statement to prevent the government’s debt from rising. Mr Hunt and Mr Sunak held talks on Saturday about the announcements. Major decisions are now locked in and submitted to the Office of Budgetary Authority. By freezing inheritance tax thresholds for another two years, the Treasury could raise up to an extra £1bn, according to wealth manager Quilter. Other calculations based on a lower inflation rate suggest lower savings for the Treasury.
Inheritance is no longer a tax on the ‘very rich’
The Government introduced a new £175,000 main house nil transferable band in 2017. It applies when a house is left to direct descendants. In 2009 only 2.7 per cent of estates paid death duties, but in recent years the figure has held steady at around four per cent. In 2019-20, the latest year for which data is available, 23,000 families paid death dues. Canada Life’s Andrew Tully said: “While inheritance tax has historically been a tax on the very wealthy, this is clearly no longer the case. “With most personal tax exemptions, including the standard rate and nil rate residence, frozen until at least April 2026, this is now a concern for larger sections of society as the inheritance tax net widens.” Mr Hunt will announce his Autumn Statement decisions in the House of Commons on November 17.
