(qlmbusinessnews.com Mon, 20th Nov, 2023) London, UK —
Autumn Statement: Chancellor Jeremy Hunt Mulls Inheritance Tax Cuts
In a prelude to next week's Autumn Statement, Chancellor Jeremy Hunt is contemplating the prospect of reducing inheritance and business taxes, as disclosed by sources to reporters. The final decision, it is suggested, hinges on the latest forecasts from the UK's primary economic forecaster.
While no concrete determinations have been made, a Treasury source emphasized the Chancellor's reluctance to rule out such cuts in a recent interview. Simultaneously, Hunt unveiled a £4.5 billion fund aimed at invigorating British manufacturing, earmarking sectors like automotive, aerospace, life sciences, and clean energy for government support.
The anticipated economic projections from the independent Office of Budget Responsibility (OBR) are expected to guide Hunt's considerations. Despite initial reports indicating a weekend decision on tax cuts, the Treasury source suggested that policy decisions may be deferred until spring.
Previously downplaying the likelihood of tax reductions, Hunt acknowledged the challenging decisions ahead for the Autumn Statement. Economists, however, estimate a potential budget of over £10 billion for such measures.
In an interview, Hunt refrained from ruling out a cut to inheritance tax, emphasizing that growing the economy remains the most effective means to alleviate the overall tax burden.
Currently, UK tax levels are at a 70-year high, as noted by the Institute for Fiscal Studies. The primary revenue source for the government is income tax on people's earnings, with no speculations of cuts to this area. However, Hunt is reportedly contemplating a reduction in inheritance tax, a levy of 40% on the value of the estate of deceased individuals.
This tax applies to the portion of an estate exceeding the threshold, impacting around 4% of estates. No tax is levied if the estate is valued below £325,000, or if amounts above this threshold are bequeathed to a spouse, civil partner, charity, or a community amateur sports club. In cases where a home is part of the estate, and children or grandchildren are set to inherit it, the threshold can rise to £500,000.
The intricacies and perceived complexities of inheritance tax have fueled considerable public debate, with many expressing concerns and finding it challenging to comprehend. The potential for changes to this tax regime adds an element of anticipation to the upcoming Autumn Statement.
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