PricewaterhouseCoopers has called on the Chancellor to make changes to inheritance tax legislation, to help relieve taxpayers’ economic burden.
The accountancy giant has recommended that next week’s Budget increase the basic monetary exemptions for IHT.
The £3,000 limit for tax-free annual lifetime transfers has been in place since 1981, and £10,000 would now be more realistic, said PwC, adding that such a rise would provide taxpayers with ‘more flexibility and help them manage their assets more effectively’.
‘The small gifts exemption of £250 is also due a raise,’ said the company, which went on to address the issue of IHT rebates.
Current rules are ‘convoluted’, it remarked, and they should be relaxed to reflect the rate and frequency at which property and asset values have fallen over the past 12 months.
PwC tax partner Leonie Kerswill commented that ‘the Chancellor should use this Budget to pause for consideration on the personal tax front.
'With so many changes to contend with, we would like to see a ‘taking stock’ Budget that provides clarity on the tax system in these uncertain economic times.'
Other measures suggested by Ms Kerswill’s firm include:
- Increase in the ISA investment limit for both cash and shares
- Rise in the amount of redundancy pay that can be received tax-free.
- Stamp duty land tax threshold to be made permanently £175,000 – or a new starting point of £150,000.
- Announcement that the newly empowered HMRC will concentrate on educating taxpayers, not pursuing them, until the new penalties system is well developed and understood.
