It seemed almost inevitable, however we woke this morning to find that, as widely predicted, Keir Starmer’s Labour party will form the next Government with a huge majority of around 170 seats – the largest Government majority in a very long time and also one of the largest swings in modern political history.
While nothing will be certain at this point, attention will now turn to the likely direction of policy and, as far as we are concerned, any measures that might impact on our Estate Planning work with clients.
While it seems likely at the time of writing that Labour will wait until the Autumn to hold their first budget, there is always the possibility of things happening sooner.
For the moment, we don’t really have anything concrete on what Labour might be planning in relation to Estate Planning or Inheritance Tax. The previous Government had proposed to move the IHT regime to a residence based one (rather than the current domicile system) but whether that measure survives remains to be seen, and it will only impact on those who spend a great deal of time outside of the UK in any case.
Beyond that, Labour had previously suggested that they might look to remove the Residence Nil Rate Band allowance, although that was some time ago now, and there are some rumours that they might be looking at some kind of restriction to Business Relief on assets for IHT purposes.
Ultimately, we now have what will probably be a limited window of time to implement planning solutions under the current rules. Although nothing is ever guaranteed, changes to the rules surrounding estate planning tend not to apply retrospectively and so one assumes that planning implemented before any changes would still be effective moving forward.
As such, now might be the perfect time to make some moves on that Estate Planning project you have been thinking about. If you would like to discuss your own Estate Planning in more detail, please don’t hesitate to contact a member of our friendly team.
