However, several potential reforms could significantly impact how wealth is transferred between generations:
Capital Gains at Death 'Uplift' Rule:
The current rule, which erases capital gains at death, could be reformed. This might involve charging CGT on gains at the point of death or making beneficiaries liable for all capital gains on inherited assets.
Nil Rate Bands:
The frozen main and residential nil rate bands could be cut or restructured, potentially affecting more families of modest wealth.
Business and Agricultural Property Relief:
These reliefs, which reduce the value of business assets for IHT purposes, might be tightened. This could particularly impact family-owned SMEs and farming businesses.
AIM Shares:
The eligibility of AIM-listed shares for business relief could be reviewed, potentially affecting investments in growth companies.
Gifting Rules:
The seven-year rule for potentially exempt transfers might be extended or abolished, making it harder to transfer wealth during one's lifetime.
Pension Pots:
Defined contribution pension pots, currently excluded from IHT calculations, could be brought into the taxable estate.
While these changes are speculative, they highlight the importance of careful estate planning. Any reforms could have far-reaching consequences for wealth transfer strategies and economic behavior.
How can we help?
At MCC Partners, we're monitoring these potential changes closely. We recommend reviewing your estate planning strategies to ensure they remain effective in light of possible tax reforms. Contact us to discuss how we can help protect your legacy in this evolving tax landscape.
