At the firm’s IHT planning round table last week, Lavin expressed scepticism over the Chancellor’s doubling of the nil-rate band in last October’s PBR’s and said the move was “complete smoke and mirrors”.
She said: “The individual band rate was £300,000 already, so, doubled, the band has always been £600,000. This change has done nothing for those who are not married and is really aimed at a fairly limited market.”
Brewin Dolphin believes business property relief and agriculture property relief could be the next IHT relief to be scrapped by the Government. Divisional director Alan Phillips warned that normal expenditure out of income could also attract greater scrutiny from the HMRC as it gains in popularity.
Normal expenditure allows a person to gift a regular fixed amount surplus to taxed income as long as he or she is able to maintain their normal standard of living. “The relief has become increasingly popular. It is potentially the most generous of all IHT relief as there is technically no defined monetary limit,” said Phillips.
Brewin Dolphin remains cautious of retrospective legislation but Lavin says: “Whether or not changes are made, the certainty is that if you do not do anything at all you are certainly going to pay inheritance tax. The uncertainty of whether it will work or not, providing it comes at a reasonable cost is still a better gamble.”