The Government when announcing its Budget on the 19th March 2014, provided a pledge that Inheritance Tax would remain at the current level of £325,000 until 2017/18.
Inheritance tax is charged at 40% on those estates above £325,000 although there are a number of reliefs available. For example, assets that pass between spouses are exempt while since 2007, rules enable the transfer of any unused Inheritance Tax threshold from a late spouse or civil partner to the second spouse or civil partner when they die. This can increase the Inheritance Tax threshold of the second partner to as much as £650,000.
To many Inheritance tax often known as `death duties` is often regarded as an unfair taxation, given that the Deceased assets could be taxed twice, during a lifetime and on death.
But how many pay inheritance tax ? figures revealed in the Budget indicate that just 17,000 estates approximately 7% of all estates pay inheritance tax. A welcome announcement was that emergency service workers killed in action would be exempt from any inheritance tax liability in the same way the armed forces are exempt if killed in action.