The Chancellor is understood to be considering extending the current 'seven-year' rule - under which gifts can be passed on free of inheritance tax - to 10 years
UK households have received a cautionary message to tread 'carefully' before potentially significant changes come into effect regarding Inheritance Tax in the Labour Party 's Autumn Budget. It is believed that the Chancellor may be considering an extension of the existing "seven-year" rule, which allows gifts to be passed on without inheritance tax, prolonging it to 10 years.
Maxwell Marlow, research director at the Adam Smith Institute, shared his skepticism, articulating that extending the gifting period to 10 years might not boost revenue since life expectancy continues to rise amongst wealthier households. Currently, gifts given over seven years before death fall outside of Inheritance Tax. However, passing away within that period can leave beneficiaries facing substantial taxes, with rates ranging from 8% to 40%, depending on when the gift was made, reports Birmingham Live.
Adding further advice for those planning for their retirement and family's future financial security, she said: "To ensure you can enjoy a long and comfortable retirement as well as help your family it is crucial to plan ahead and take advice."
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