Autumn Statement could bring reform to inheritance tax and stamp duty

The government is reported to be considering cuts to both inheritance tax (IHT) and stamp duty as “options” for its Autumn Statement on 22 November. There is hope that this move could prove popular with voters while also stimulating economic growth.

Chancellor Jeremy Hunt has previously stated that he would not introduce “any tax cut that is going to fuel inflation”. However, reducing IHT and stamp duty would be less inflationary than cutting, for example, income tax or national insurance.

The hope would be that a reduction in stamp duty could boost a sluggish housing market, while changes to IHT could attract voters in key constituencies.

IHT is currently charged at 40 per cent over the tax-free threshold of £325,000. Options could include increasing the threshold, which has remained static since 2009, or lowering the headline rate.

Industry insiders have reacted with interest to the possible changes. Speaking to This is Money, Shaun Moore, tax and financial planning expert at Quilter, said: “Making moves to modernise inheritance tax could be a real rabbit out of the hat moment for Jeremy Hunt at the Autumn Statement. Despite IHT being paid by only 4 per cent of the nation it is a tax that many people find egregious.”

Sian Steele, head of tax at wealth manager Evelyn Partners, added: “The nuclear option of abolishing inheritance tax, which has been reported as under consideration in government, would certainly grab some headlines, but seems more likely as a manifesto promise.

“It’s worth noting that while this might be seen as a possible tax giveaway to appease older and wealthier voters, it is actually the possibly-not-so-wealthy children and grandchildren of today’s retired savers who would benefit – as it is the beneficiaries of an estate who pay the inheritance tax bill.”