Financial advisor: Plan for a ‘devastating’ inheritance tax raid
British families and expats with assets in the UK should act now to mitigate the potential impact of an inheritance tax raid in next month’s Budget, the boss of one of the world’s largest financial advisory firms has warned.
Nigel Green, who founded Devere Group in 2002, said the upcoming fiscal announcement was likely to include “significant hikes” in inheritance, capital gains, and pension taxes that could be “devastating” for some families.
His warning comes almost a month ahead of Chancellor Rachel Reeves’ first Budget, the run-up to which has been dominated by frenzied speculation about a possible raid on wealth to plug the hole in the public finances.
During the summer’s general election campaign, Labour vowed not to raise any of the main taxes on “working people”—income tax, national insurance, or VAT.
And, at this week’s party conference, it reaffirmed its commitment not to raise corporation tax.
Devere believes these commitments leave inheritance tax (IHT) “squarely in Labour’s crosshairs,” prompting “a discernible uplift in the number of “genuine panic” from clients asking about how they should arrange their affairs ahead of Reeves’ statement on 31 October.
Green said: “We’ve seen an overwhelming surge in enquiries from clients, both existing and new, seeking urgent advice on how to protect their wealth before Chancellor Rachel Reeves delivers what is expected to be a painful financial blow next month.
“But the truth is that these plans will unfairly punish families who have worked hard to build their estates. With soaring property values pulling more and more ordinary families into the IHT net, this isn’t a tax just for the ultra-rich anymore,” says Nigel Green.
Currently, IHT is levied at at a rate of 40 per cent on the remainder of any estates worth over £325,000. Just four per cent of estates pay the tax.
The Resolution Foundation, a leading think tank, predicts that ballooning house and asset prices mean that by the 2023/4 tax year, estates affected by inheritance tax will double, assuming it is not reformed.
Green added: “The frenzy of enquiries is only going to increase as the budget draws nearer.
“Don’t wait until it’s too late. By acting now, families can take advantage of the current rules, ensuring they keep control over their wealth and avoid the damaging effects of Labour’s likely tax reforms.”
Green’s comments follow several other warnings about reforming the tax, which a YouGov poll found to be the least popular of all of the UK’s main avenues of taxation.
Darius Mcdermott, managing director of FundCalibre, warned removing the special status from market, which has been suffering from languid share prices and a bout of high profile de-listings, would risk another “Liz Truss moment”, due to a rapid sell-off.