Inheritance tax warning as wealth levies in Rishi Sunak’s ‘firing line’ | Personal Finance | Finance
Mr Sunak set out his Budget o Wednesday as the UK economic system appears to be like to get well from the coronavirus disaster and financial turmoil. The nation’s public sector debt has exceeded £2.1trillion and the Government’s COVID-19 invoice has surpassed £400billion. A key announcement got here concerning pensions, as the lifetime allowance shall be frozen. The present restrict of £1,073,100 will stay in place till 2024, capping how a lot savers can put in with out accruing tax payments.
It was as a result of rise by 0.5 % in the brand new tax 12 months and would have been some £76,000 increased by 2025 earlier than the freeze, based mostly on the Office for Budget Responsibility’s inflation forecasts.
While tax hikes had been largely placed on maintain, Steven Cameron, pensions director at Aegon, tells Express.co.uk that wealth taxes may very well be in the “firing line” as Mr Sunak considers reforms.
Mr Cameron stated: “Wealth taxes could be put in the firing line because if Rishi Sunak wants to be seen as making the wealthy pay, you might increase wealth taxes or reduce exemptions.
“Capital positive factors tax is one and inheritance tax may very well be one other.”
Mr Cameron believes that, as the Government seeks to overhaul social care, wealth tax changes could be considered.
He continued: “There’s a myriad of issues he may do to do that. I see this as linked to the opposite massive problem the Government has with social care funding.
“The Government, when it was elected, promised it would come up with a new deal on social care funding, but they haven’t done that.
“We reside longer as a era, and many people will want social care later in life – and that must be paid for.
“Any new deal would need to say ‘here’s where the Government will pay, but here is where you will pay according to your wealth.
“I might anticipate to see wealth taxes reviewed alongside social care funding.”
READ MORE: Big business ‘won’t pay for pandemic’ as Sunak gives £25bn handout
“Sunak did say that it’s too early to make detailed fiscal coverage bulletins. We nonetheless do not know the complete prices of furlough and different assist schemes. We nonetheless do not know the complete affect on the economic system.
“I do expect he will be making further changes which could be of a detailed and wide-ranging nature. We shouldn’t assume that because he didn’t announce things yesterday, he won’t be thinking about them as longer term measures.
“We have gotten a manifesto dedication on the pension triple lock and tax triple lock, with all of those locks he is bought extra locks than Houdini to grapple with.
“At some point, the Government might decide we have to be open with the public and say, ‘If we stick with these manifesto commitment we will have too many restrictions to do what is right to do.’
“He’s not executed it up to now, however in future there might come a time when he has to degree with the general public.”