Rumours about the forthcoming Budget abound - what will the Chancellor do? The truth is, no one knows until 30 October. However, the likelihood is that there will be some changes to inheritance tax.

The one thing about this tax however is that the Government has little control over the timing of its receipt as it is primarily paid on death.

The tax take from inheritance tax has been steadily rising in any event - largely due to a freeze on the nil rate band - the amount you can pass on without inheritance tax - which has been £325,000 since 2009, with the Residence Nil Rate Band for those estates eligible, with a further £175,000 which also hasn't increased since 2020.

Will the headline rate of 40% tax over available allowances really increase? I'm not so sure on that as its already quite a significant tax rate. 

However, the nature, range and level of exemptions and reliefs could be reviewed, refined and narrowed. Business and agricultural reliefs might be in for a shake up.

Periods for tax planning might increase - which would mean gifts stay on the inheritance tax ‘clock’ as a taxable part of your estate for longer than the current seven years.

With rumours like this circulating, its easy to ask ‘should I act now?’ but the reality is we do not know what the Budget will actually have in store until it is announced. The devil, as they say, will be in the details to be announced on 30 October. 

For more information on inheritance tax, please contact me.