Money News
Chancellor Darling has doubled the inheritance tax threshold for married couples and those in civil partnerships to £600,000 immediately, rising to £700,000 from 2010. Darling said his proposals would mean that 97% of estates would be exempt.
Although IHT reform had been trailed by the Tories before their Party Conference last week, Darling didn't go as far as Tory plans to exempt estates worth up to £1 million.
He also dismissed Tory plans to pay for the cut in IHT revenues with a £25,000 flat rate charge on "non domiciled" wealthy foreigners - arguing that the numbers didn't add up and would only raise £650 million instead of the £3.5 billion the Tories claimed. However, he did confirm he would be bringing forward his own measures to ensure that "non doms" were made to "pay their fair share" when it comes to taxes.
Ian Maston, director of inheritance tax at tax planners Chiltern noted that whilst the IHT changes were welcome in that they will save couples the need to jump through hoops when planning their wills, prudent people will have already arranged their affairs to achieve this anyway. Hence, the Chancellor's announcement won't save them a penny.
10 October 2007 © Moneyextra.com
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