Paul Wilcox, chairman of WAY Group and IHT planner, says the Government is unlikely to change its IHT policy for baby boomers.
The comment comes after the French Government raised its IHT threshold from €50,000 to €150,000 per parent for each child. The changes mean up to 95% of the French population will not have to pay IHT upon their parents’ deaths.
However, Wilcox believes the UK Government is unlikely to follow France's lead.
“Chancellor Alastair Darling, like his predecessor Gordon Brown, will be loathe to extend any tax breaks to baby boomers – the first truly well off generation for the most part property wealthy individuals," he says.
“The fact is that the revenue from IHT is central to the Government’s core planning, and the current baby boomers who are now retired or about to retire will start to die off within the next decade or so, and the Treasury is licking its lips in anticipation of some bumper pay days.
“Even accounting for longer life expectancy because of medical advances, less smoking and more informed diet and exercise programmes, the first true baby boomer generation – those born immediately after the end of World War Two – should be putting serious IHT planning in place.
“When you think that those first baby boomers most likely bought their first homes in the mid to late sixties, when the average semi could be picked up for less than £5,000, you get an idea of the kind of wealth built up in many of these families.”
The number of homes valued above the £285,000 nil rate IHT threshold has almost doubled in five years, according to Halifax. The average value of a detached house in London, the South East and the South West has reached more than £300,000.
Last month the Conservative Party proposed to abolish IHT and replace it with capital gains tax. The party proposed raising the seven year tax exemption period before death to ten years. Standard Life said the scheme would lead to more gifting through trusts.
To comment on this story contact:
Tel: 020 7034 2679
E-mail: [email protected]
Slow progress in improving diversity
Share purchase deal with assets of £28m
Came into effect in January
Three examples of compensation rule issues
Buying in baskets