What Impact will a Labour Government have on Estate and Tax Planning?
Out with the old, in with the new. As we all woke up last week to the official announcement that we have a new Labour government and Prime Minister, thoughts turn to the potential impact in the medium to long term in relation to estate and tax planning.
Richard Barlow, Director and Head of Private Client Services in Sheffield, shared his thoughts below.
Of course at this very early, stage it is impossible to ascertain likely implications and there has been (and will continue to be) much speculation surrounding inheritance tax (IHT) in particular.
Of course, there was no statement or commitment in the Labour manifesto relating to IHT and indeed the manifesto generally sets out relatively modest tax plans. There was talk in the recent past of the potential scrapping of inheritance tax, although highly unlikely in my view, especially now. The IHT nil rate band has been frozen at £325,000 since 2009 and currently will remain so up until April 2028. Labour may look at the nil rate band, they may look at the present ability to claim a residence nil rate band up to £175,000 (if the relevant conditions are met) or it is possible that they focus on certain reliefs available, for example business property relief. Any changes could potentially have a huge impact, but we can only speculate at this stage.
The Labour manifesto highlighted a desire to improve the current care system and in particular implement a ‘care at home first’ approach in order to help people live independently for as long as possible. Labour have not provided any detail in support of this and it remains to be seen how this will be rolled out. Also, Labour did not seem to dismiss the existing plan to place a cap on the amount a person should pay for personal care over their lifetime but again there has been no firm commitment on this.
So, at the moment, we are very much in a ‘watch this space’ situation and we will keep a keen eye on developments and decisions made over time.
Our team of experts is here to help you stay informed and prepared for whatever comes next. For personalised advice, and to discuss how potential changes might affect your estate and tax planning, contact us for support on 0114 3497000 or contact:
Richard Barlow
Tel: 0114 6987463
Email: richard.barlow@brmlaw.co.uk
