As the Autumn Budget approaches, the majority are wondering what has Chancellor, Jeremy Hunt planned to announce? Speculations are already circulating, with tax cuts being a hot topic.
With the update in a week’s time, we asked some of our tax experts for their thoughts and predictions.
Here’s what they think…
First up is our Tax Director, Michael Burgess. Understanding he might be sticking his neck out with his thoughts, he thinks the decision to freeze tax bands will be reversed, due to higher-than-expected inflation (and therefore cost of living), and the resulting burden on taxpayers being felt sooner than anticipated. He also expects changes and/or simplifications to Inheritance Tax (IHT).
What’s next for Inheritance Tax?
Those changes in Inheritance Tax that Michael touches on were certainly on the minds of our Tax Team, with five others making reference to it in their predictions.
Starting off with a bold suggestion, Christine Wise, Tax Manager proposes replacing IHT with Capital Gains Tax (CGT) on the death estate, with the option to roll over gains to the next generation, along with the introduction of a nil rate band for cash balances.
While not expecting a complete abolition of IHT, Mark Morris, Senior Tax Manager, suggests potential tweaks to the current system. This could include a cut in the headline rate or an amalgamation of the current nil rate bands to simplify the system and potentially make it fairer.
Shannon Steele, Tax Manager, also doesn’t anticipate IHT being abolished, but predicts the possibility of combining the Nil Rate Band (NRB) and Residence Nil Rate Band (RNRB) to provide everyone with a £500,000 allowance, scrapping the RNRB altogether.
Rebecca Moseley, Tax Manager, suggests a possible reduction in the rate of Inheritance Tax charged on estates above the £325,000 tax-free threshold, whilst Josh Draycott, also Tax Manager, expects changes in the IHT system, including possible cuts or alterations to the Nil Rate bands.
What else might the Chancellor announce?
For business, Keeley Murray, Tax Manager, believes that the Annual Investment Allowance will be increased to encourage business investment, whilst for those with electric cars, Ian Parsonage expects a significant increase in benefits in kind.
Connor Smith, Senior Tax Manager also suggests additional anti-avoidance legislation, particularly regarding Employee Ownership Trusts.
For personal tax, to encourage saving and maximise the benefits of increased interest, Beth Hickman, Tax Senior, predicts an increased annual ISA (Individual Savings Account) limit.
Brody Evans, Tax Trainee, thinks there will be an increase in the additional rate of income tax back to 50%.
Kelly Yang, Tax Manager, predicts the watering down of the Triple Lock, as the current affordability is being questioned by the government.
So, that’s what our experts think. Now we sit tight and wait to see if any of our terrific tax team’s predictions were accurate next week. We’ll be keeping a close eye on the announcement for our early-round up, followed by our detailed report on Thursday.
