Government Set to Freeze Inheritance Tax Threshold
Health Secretary, Jeremy Hunt, has revealed that the cap on the amount that elderly people will have to pay for their social care costs will be partially paid for by a ‘freeze’ on the inheritance tax threshold.
Feb. 26, 2013 - PRLog -- LONDON -- The changes that were recently unveiled by the Health Secretary are set to come into force from 2017. In 2017 the government will meet care costs accrued by the elderly that exceed £75,000. According to Mr Hunt an extra 100,000 people are set to benefit from these changes which he expects to make a significant change to those affected.
It was revealed that the cost to the Exchequer will be 1 billion pounds per year by the end of the next Parliament. Therefore, the Government have stated that they will freeze the inheritance tax to £325,000. For couples inheritance tax will be set at £650,000 for three years from 2015/2016.
Ordinarily the inheritance tax threshold would rise in line with inflation. According to the statistics this means that the decision to freeze the current rates will mean that an additional 5,000 individuals will be affected by inheritance tax each year.
Marcus Redford, Director at Redford & Co, commented, ‘The inheritance tax threshold has only increased by just over £100,000 over the past 14 years which most will admit does not keep up with the average rise in house prices, so it is disappointing that this form of stealth tax is being used to fund these new measures”.
Redford & Co is a firm of chartered accountants based in central London. The firm has expertise in several different areas including business tax advice, investment and pensions. They offer services to businesses looking for advice on bookkeeping and VAT, payroll and PAYE. For further information on the current inheritance tax thresholds you can contact Redford & Co today or visit http://www.redford.co.uk/