Chancellor Rachel Reeves set to raise inheritance tax in upcoming Budget raid
18 October 2024, 11:15
Chancellor Rachel Reeves is set to raise inheritance tax in the upcoming Budget.
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The PM and Ms Reeves are understood to be considering multiple changes to the tax, which currently includes several exemptions and reliefs.
It comes ahead of the Budget on October 30, in which Ms Reeves is facing growing pressure to raise revenue and boost growth.
Inheritance tax is charged at 40 per cent on assets above a £325,000 threshold when somebody dies.
Only four per cent of deaths currently result in an inheritance tax charge, which raises the government around £7bn a year.
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Ms Reeves is expected to either increase the headline rate or lower the threshold at which the tax becomes payable, according to the BBC.
Alternatively, there could be changes to exemptions and reliefs, such as amendments to rules around gifts that are given while alive.
Another option is alterations to the exemption of businesses and farmland.
A Treasury spokesman said: "We do not comment on speculation around tax changes outside of fiscal events."
Ms Reeves is looking to raise up to £40 billion from tax hikes and spending cuts in the Budget as the government seeks to avoid a return to austerity.
Sir Keir on Thursday faced a Cabinet backlash over the planned measures, with several ministers writing to the Prime Minister directly to express concern about proposals to reduce their departmental spending by as much as 20 per cent.
Downing Street warned that "not every department will be able to do everything they want to" and "tough decisions" would have to be made.
The Prime Minister's official spokesman confirmed Sir Keir and Ms Reeves have agreed on the "major measures" of the Budget, including the "spending envelope" that sets out limits for individual Whitehall departments.
While some spending cuts are all but inevitable, tax rises are expected to form the centrepiece of Ms Reeves' plans to fill what the government calls a "black hole" in the public finances left behind by its Tory predecessors.
