By James Rodger

Copyright birminghammail

A one-month warning has been issued to inheritance tax taxpayers amid a huge shake-up. Inheritance tax is reportedly in the Labour Party and Chancellor Rachel Reeves’ crosshairs ahead of the Autumn Budget. Reme Holland, financial planning partner at accountancy firm Albert Goodman, said: “Inheritance tax is one of those areas that is always under the spotlight, and it seems to be a popular point of discussion at the moment. “We’ll see what happens in October, November time, but I would always say, don’t make any rash decisions. Seek advice first before you do anything.” READ MORE Drivers in England face new midday to 8pm ban from September 21 “Every individual has a nil rate band of £325,000, which means you can have assets worth up to £325,000 and not be liable for any inheritance tax (IHT),” Holland explained. “A spousal exemption means that a husband and wife [for instance] could leave everything to each other, and no inheritance tax would be due,” Holland continued. “It would only be due on the second death, at which point both those allowances [of £325,000] could be combined.” Holland also added: “There is another exemption called the main residence nil rate band, which is a further £175,000 each for married couples. One of the conditions for having that extra allowance is the property has to be left to direct linear descendants, so children and grandchildren.” “One of the things the government has mooted over the summer is putting a cap on how much can be gifted, and that cap could be somewhere between £100,000 and £200,000,” Holland said. The second change the Government has talked about is removing the taper. “So if you died at any point during those seven years, the full 40% IHT would be chargeable on the value of that gift,” he added. Holland said: “In the grand scheme of things, these two changes to the value of lifetime gifts would affect those on the high end of wealth. The everyday person wouldn’t be impacted by a lifetime cap on gifts. “However, if you couple these with some of the changes that are possibly coming into effect over the next two years, such as the treatment of pensions, and also, if you’re a business owner, it then might start to have an impact on more people.”