Inheritance Tax - Hold Your Breath

The payment on tax on death has undergoneabove the Inheritance Tax threshold (currently
significant changes in the last couple of years.£325,000) at 40%. However, for married
Interestingly, Inheritance Tax, as it is known in the UK,couples or civil partnerships, if the first person dies
becomes one of the main focuses of attention inwithout using their £325000 allowance, the
Party Conference season. The Conservatives stole asurviving partner may use both allowances on their
march on the Government last year, when theydeath, and Inheritance Tax will only be paid on assets
announced that would allow the unused tax exemptionover and above £650,000.
on the death of the first spouse to be available on theThe Conservatives, had prior to Conservative Party
death of the second spouse.Conference yesterday, heralded a further change to
Previously, the only way to mitigate the full payment onInheritance Tax, once they were in power, by taking
Inheritance Tax on the death of the surviving spouseout everyone other than literally millionaires. The
was to employ expensive and complicated truststhreshold would be increased to a £1,000,000.
utilising the then so called "Nil Rate Band DiscretionaryYesterday's announcement by the Shadow
Trust." Well, lo and behold, the Labour GovernmentChancellor, George Osborne, appeared to suggest that
thought that they might be seen as an unnecessarilythe alteration in the exemption in IHT would not be a
punitive taxing government, especially when more ofpriority. Political speak with the effect that these
Gordon Brown's "hard working "families were caught inchanges may not be introduced in the next Parliament.
the Tax trap, and copied the Conservative's plan.As, the title to this post alludes, if you wish to save on
Now, the present rules are that, IHT is levied on aTax on your Inheritance; Hold your Breath!
person's estate and is payable on all assets over and