Is this the end for IHT reliefs? The Inheritance Tax changes announced
in the Autumn Budget have certainly caused a stir. Particularly in the farming world, with the recent protests being heavily publicised in the media.
The introduction of a cap for only the first £1 million of BPR or APR assets to qualify for relief has potentially exposed many farmers and business owners to significantly higher IHT liabilities.
Cash flow Once you understand the impact of the changes, it’s wise to consider the executor’s cash flow and their ability to be able to pay the IHT liability. Clearly if a large proportion of wealth is held in share or land then it may not be easy to realise cash flow, but the following options can be considered:
We take a look at what you can do if you’re affected by these changes.
Understanding the impact to you Before making any rash decisions, you should take advice to understand what your potential IHT position looks like following the changes. Quantifying the impact should help to give context to your decisions.
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Borrowing funds to settle the liability. Is this manageable?
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Life insurance – depending on your age and health this might not be an option.
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Selling part of the business or farmland. This is less practical for a business as it could incur additional taxes. Likewise, the sale of any land can take time to sell and there would be further tax consideration on the sale.
4 | SCRUTTON BLAND | PRIVATE CLIENT
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