Rumours of the abolition of the Inheritance Tax.
There are rumours circulating in the press of the possible abolition of inheritance tax (IHT) in a bid by the Government to secure the support of wavering Conservative voters. This may cause some individuals to delay IHT planning, but remember these are just rumours, and it may not actually happen.
It should be noted that under the current IHT rules there are a number of generous reliefs and exemptions that would apply, as opposed to speculation of possible future changes. For example, business property relief is available on the transfer of shares in an unquoted trading company during lifetime or on death, such that no IHT would be payable. However capital gains tax potentially applies to a lifetime transfer of shares, subject to a possible claim to hold over the gain.
So, the current rules allow tax planning to be undertaken with an element of certainty, as opposed to
speculating about possible future changes.
HMRC Raise Interest rates again as Base Rate increases.
HMRC interest rates are linked to the Bank of England base rate. Late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.
The latest increased the Bank of England base rate from 5% to 5.25% means that interest on late paid tax will increase to 7.75% for most taxes and the rate of repayment interest will increase to 4.25% if you overpay.
These changes came into effect on 3rd August 2023.
For those companies required to pay their corporation tax by quarterly instalment payments the rate will increase to 6.25% from 14 August 2023.
If you are late with your self-assessment payment on account for 2022/23 that was due on 31 July 2023 then you should pay as soon as possible to avoid incurring further interest charges. Note that there is a 5.25% surcharge added to any tax still outstanding at 28 August 2023 unless you have agreed a payment plan with HMRC.
