IHT regime is outdated and in serious need of an overhaul - Boodle Hatfield

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23 Mar 2021

IHT regime is outdated and in serious need of an overhaul

Private Wealth Partner, Kyra Motley appears on the FTAdviser In Focus podcast alongside Edward Grant, Director at St James's Place and Nick Bird, Business Development Manager for Octopus Investment to discuss how inheritance tax (IHT) planning is in desperate need of an overhaul.

In summary, Kyra reflected on how IHT it is now a tax on Middle England, although designed to be a tax on the wealthy, when introduced in 1986.  She said she welcomed the introduction of the residential nil-rate band in 2017, which gave people an additional amount of allowance when they leave their property to direct descendants, but said there was more to be done. Motley believes there was a huge opportunity for the government to make changes to the IHT regime to bring green investments within its scope. This, Motley said, would bring more revenue in as people are increasingly looking for tax-efficient ways to invest according to their environmental, social and governance values. “If you ask how out-of-touch the legislation is, it is out-of-date in so many ways. It is a tax that could be used to encourage investment in so many areas where you could get an exemption from IHT (such as business property relief and agricultural reliefs. People want to invest in assets that qualify, so their estates do not pay IHT, and those two reliefs alone were worth £3.5bn in 2018, so there is some scope as we look at how the world is changing, to expand on this and transform IHT.”

To listen to the full FTAdviser’s podcast please click here. The podcasts are also available on Apple Podcasts, Spotify, Stitcher and Acast.