Death tax raid to hit families

THOUSANDS more families could be forced to pay Britain’s most-hated tax under plans being considered by Jeremy Hunt for his Autumn Statement.

The Chancellor is expected to freeze the inheritance tax threshold until 2028 as the Treasury scrambles to fill the black hole in government budgets.

Rishi Sunak, as Chancellor, froze the threshold last spring at £325,000 until April 2026. Now Mr Hunt is expected to extend that for another two years.

Currently, people must pay 40 per cent in death duties on the value of an estate above the threshold.

This could mean bereaved families paying collectively £1billion extra in IHT from 2026 to 2028, according to calculations by wealth manager Quilter.

An estimated 10,000 additional people could become liable for the levy.

Alex Davies, from investment consultants Wealth Club, said: “Freezing the inheritance tax threshold is an increase on the sly. It won’t appear on a list of tax increases but it won’t be too long before its impact is felt by people.

“It’s not just the super-rich. It will be hard-working families caught in the cross hairs of high property prices and frozen IHT allowances.”

Myron Jobson, analyst at the investment platform Interactive Investor, said: “IHT is no longer a tax on the wealthy as runaway house prices have dragged an increasing number of estates into the net.”

He labelled the tax a “moneyspinner” for the Government with £3.5billion collected between April and September this year – £400million more than in the same period 12 months ago.

Jason Hollands, from online investment service Bestinvest, said extending the IHT threshold freeze amounts to a “significant wealth tax”.

He added: “Ever more people who would never have imagined being hit with death duties are finding that their parents or grandparents’ estates are becoming subject to taxes, especially given the strong rise in property and share prices over recent decades.”