The wealthy British offer more money due to their fears of the inheritance tax

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The wealthy British are increasingly giving money to their family members with the increasing fears that Rachel Reeves may make the inheritance tax system more punitive, according to wealth managers.

Tax consultants told the Financial Times that they have seen an increase in gifts and inquiries about mitigating death fees since before October. budgetWhen the advisor has made plans to impose inheritance tax on pensions and agricultural lands.

Reeves last month Receive an emergency spring budget. But some analysts and advisors have warned that it might expand the inheritance network in an attempt to support the government’s financial plans.

These concerns have prompted more people to provide financial gifts under the current system, which does not apply IHT with 40 percent to gifts unless the donor died within seven years.

“The seven -year -old base is now available to seize it, and it seems that this is the next goal,” said Nimach Shah, CEO of Blake Rothnberg Accounting. “You can expand it to 10 years. Inheritance tax is now at the forefront of concerns.

Oli Cheng, Director of Financial Planning at Rathbones, said that the wealth manager “sees a lot of concern about the place that the government will target after that” after its procedures targeting retirement pensions and farmers.

He added: “There is a feeling among many people that more tax increases will be needed to achieve balance in the books, and the result of uncertainty is that people offer gifts that may be presented at a later time.”

Fears about increasing IHT come even as government revenues continued to increase the tax, as the HM Revenue & Customs, the Tax Authority, brought together 6.3 billion pounds between April and December 2024.

The government gathered less than 1 percent of the total revenue from death fees, but Reeves pledged during the general elections last year not to increase income tax rates, national insurance, or value -added tax, he did not leave a major area of ​​maneuvering to increase revenues.

This week, Reeves referred to the reduction of tax reforms on the wealthy people who are not residents after warnings that its proposals drive people to leave Britain. But Shah said the changes “will not have any effect on the IHT direction.”

Wealth managers said that many of their customers faced the possibility of their real estate within the IHT range over the next decade, as some attributed the increase in dedication to changes in HMRC treatment for pensions and agricultural lands.

The unused pension vessels will be included in the real estate as of April 2027 and are subject to the IHT rate of 40 percent. Meanwhile, land owners will be subject from April 2026 to a 20 percent tax on agricultural lands that exceed a limit ranging from 1.3 million pounds and 3 million pounds, depending on whether they are married and if they own a home.

Emma Sterland, the main financial planning director at Evelyn Partners, said the reforms on retirement pensions and land taxes were behind the rise of “agents considering providing financial gifts to their families”, with a budget guide that IHT was “in the range of the Treasury.”

Ian Cook, a certified financial plan for Coierre Civiot, said that he was encouraging customers to “think about gifting more strategic” in light of the upcoming pension tax reforms after he began more “by exploring ways to transfer wealth during their lives.”

The Treasury Ministry did not immediately respond to a request for comment.