"The irony of any forthcoming Budget measures is that the property market slowdown and increased caution of parents gifting to their offspring ‘Bank of Mum & Dad’ style may mean any IHT changes become an own goal for the Treasury in any event"
- James Ward - Kingsley Napley
A YouGov poll commissioned by law firm Kingsley Napley shows that 54% of the British public now want a complete abolition of Inheritance Tax (IHT), up from 49% a year ago.
Opposition to tougher IHT rules has grown despite the strained state of public finances:
76% oppose an increase in the current 40% IHT rate, up from 69% in September 2024.
67% support raising the £325k threshold at which IHT becomes payable, a small increase from 64% last year.
The research also reveals that very few people have taken professional advice on reducing a potential inheritance tax liability. Three-quarters (76%) have either not considered or decided against doing so, even though more estates are now falling within the scope of IHT.
The findings come just weeks ahead of Chancellor Rachel Reeves’ Autumn Budget, when she is widely expected to maintain current thresholds while introducing tweaks to exemptions. Changes may target pensions, and business and agricultural land reliefs, while rumours suggest a gift cap or adjustments to the tapering of gift allowances, along with a potential removal of the primary residence nil rate band exemption.
“Inheritance tax is effectively this country’s wealth tax. It is only paid by one in 20 estates, and whilst it is not a big money spinner for the Treasury in the scheme, it will no doubt be tempting for the Chancellor to squeeze more revenue out of these estates given her other pledges," explained James Ward, partner and head of private client at Kingsley Napley. "Ms Reeves is unlikely to give two hoots about growing public opposition to IHT reform, despite the fact that it is evenly spread in the voter community. The next election is also likely too far off for her to choose political over economic value in outflanking Farage.”
Ward added: “We have had a busy summer of clients wanting to estate plan ahead of possible IHT-related Budget measures. However, our research shows that only 5% of the general public have taken advice on mitigating any IHT that may be due on their estate. Many may therefore be missing an opportunity to protect their estates for loved ones left behind."
"Of course, the irony of any forthcoming Budget measures is that the property market slowdown and increased caution of parents gifting to their offspring ‘Bank of Mum & Dad’ style may mean any IHT changes become an own goal for the Treasury in any event.”
“There is still time to gift out of excess income, set up trusts, or benefit from potentially exempt transfers before these measures are blocked in future,” Ward said.
