Inheritance tax and the general election

What are the five main political parties proposing in relation to inheritance tax? We look at each party's manifesto.  

Inheritance tax is unlikely to be at the top of any party's political agenda, but it has been known to feature in campaigns, though it is usually drowned out by bigger fiscal issues such as income tax and in particular the rates at which it is charged.

When it comes to income tax, charities need to know how much they are entitled to claim back in relation to legacies, but changes to the rates do not usually cause too much of a problem. 

The position for capital gains tax is similar: a new government can change the rates and allowances, but, as long as policymakers don't get too creative, the tried and tested tactic of assenting or appropriating assets before sale should stand firm.

Any changes to charity exemptions however could cause difficulties, though currently there is no indication that this is likely to happen.

What about when it comes to inheritance tax?      

We have gone through the five main parties' manifestos to check for references to inheritance tax, so you don't have to. 

PartyReferences to inheritance tax
ConservativesThere is one reference to retaining the agricultural and business reliefs. This is a little surprising, as there has been much speculation in the media in recent months about the Conservatives cutting or even abolishing inheritance tax.
LabourThere is one reference, i.e. "ending the use of offshore trusts to avoid inheritance tax". This is in keeping with Labour's wider theme of cracking down on tax avoidance.
Liberal Democrats None
GreenThere is one reference to reforming inheritance tax to make it fairer, but no detail on the how. There is a theme of increasing taxes on the super-rich, which could give a hint to what the direction of travel might be.
ReformThere is one reference to increasing the nil rate band to £2M and another to reducing the rate to 20%. It also says: "with the option of donating to charity instead'. This option has always existed.

In summary, there is not a great deal for charities to be concerned about in the inheritance tax space.  Tax aside, there are plenty of changes that couldbe made to improve things in the charity legacy sector, not only in legacy income management, but also in legacy fundraising, where more government support would be welcomed by charities across the board.

If you are interested in hearing more about any of these issues, please contact a member of the team below.