Labour defends inheritance tax hikes as reforms ‘get the balance right’ | Personal Finance | Finance
Labor defended a great increase in the inheritance tax, claiming that the changes hit the right balance. There are currently plans for agriculture and business relaxation, which means that some farms do not pay taxes while passing their property. In accordance with plans, relaxation will only be valid for £ 1 million assets, and the rest will be effectively taxed at 20 percent, while the rest will achieve a relaxation of 50 percent.
The government also announced the plans of pension containers to be subject to inheritance tax since 2027. The Conservative Deputy Mims Davies asked the government whether he was thinking of an independent examination of the proposed changes for farmers.
Treasury Minister Dan Tomlinson responded. The Minister said that the changes have been discussing with several groups to discuss the issue since the autumn budget was announced in 2024, but the government believes that plans were “appropriate”.
“The government believes that the reforms for agricultural property assistance and the aid of labor ownership from April 6, 2026 have taken the balance between supportive farms and businesses and to correct public finances. Reforms reduce the advantages of heritage tax for agricultural and business assets, but still these assets will be taxed at a much lower rate than other assets.”
The Minister said that the inheritance tax reduction levels for farms will still be “important” after changes. He announced that a invoice can pay the amount over the 10 -year installment that should be collected from the unpaid amount.
Mr Tomlinson also said how many people will be affected by the changes: “Reforms are expected to result up to 520 property, including those who demand the help of work property and pay more inheritance tax in 2026-27.
“Almost three of the properties requesting agricultural property assistance, including those who request the assistance of labor property, will not pay more taxes as a result of changes in 2026-27 based on the latest data.
“Reforms for agricultural property assistance and the aid of labor property are expected to collect the United 520 million at 2029-30. Budget Responsibility Office approved this cost in the autumn budget in 2024 and does not expect reforms to have a significant macroeconomic effect.”
The inheritance tax is a 40 percent tax that applies to the total assets transferred when a person dies. Each individual means that they can transfer an extra 175,000 £ when passing your assets and main housing without paying taxes.
Any unused appropriation can be transferred to your spouse or civilian partner, that is, when they pass their second partner to their property, they can get an effective allowance of £ 1 million.
