06 Jul 2015
Ahead of the Second Budget this week, Chancellor George Osborne has released more details of the planned changes that the Conservative Government will enact.
In the first fully Conservative Budget in 18 years, the inheritance tax threshold will be increased to £1 million for couples, effective from 2017. Being dubbed the ‘family home allowance’, the move could save individuals up to £175,000 on top of the current £325,000 tax free allowance.
The Institute for Fiscal Studies (IFS) released a statement saying: ‘Since the children of those with very large estates are disproportionately towards the top of the income distribution, the gains from this [and in fact any] Inheritance Tax cut will also go disproportionately to those towards the top of the income distribution’.
Other measures expected on Wednesday include reducing the household benefits cap from £26,000 to £23,000 per year, and a further clampdown on wealthy individuals claiming non-domicile status.
With further changes as yet unknown, the Chancellor’s Budget Speech is expected to unveil the rest of the proposed £12 billion in welfare cuts, which will be rolled out over the next two years.