Well that was all rather uneventful. This time two weeks ago, the Autumn Statement was looking completely benign from a personal finance point of view. Yes, there was some degree of speculation that we would see some modest tinkering with personal taxes, but there was certainly nothing of any significance to speak of in the rumour mill.
Then on Thursday evening, the big one dropped – there were (apparently) discussions around reducing, or even abolishing, IHT.
Personally I always thought this unlikely, but the rumour mill seemed to go into overdrive at the weekend and I was starting to doubt myself – could they do it? Would they do it?
After all the drama of the weekend and the prospect of a really rather exciting Autumn Statement, it ended up being… rather benign really – just like the original predictions.
First of all, I think the past few days once again highlight the folly of taking the ‘media reports’ too seriously – it is so easy for them to report that there are ‘serious discussions’ going on in Government about whatever it might be they wish to speculate about and there is then no repercussions if those ‘rumours’ turn out to be total codswallop.
I have long said it is crazy to take or refrain from action based on what the daily papers are reporting – we have to plan based on what we know about today and what is already legislated for tomorrow.
Secondly, surely it is that case that we don’t currently have the political environment to support a cut in IHT. Giving what will be reported as a ‘tax break for millionaires’ when we have so many people struggling with basic essentials like heating their homes or turning their ovens on was always going to be a hard sell, and it provides a very easy line of attack for the Labour party as well.
Whether an IHT cut was ever seriously being discussed we will probably never know, but there was no mention of it at all in the Autumn Statement speech, and, perhaps even more tellingly, not even a mention of the words Inheritance Tax in the whole of the 120 page Autumn Statement document itself. No comments, no consultations, nothing.
My sense is that the political environment is not going to change in any significant way between now and the spring and so an IHT cut then looks as tricky as it does now.
In any case, I would wager the vast majority of people who are likely to pay IHT are probably Tory voters in any case and so they are not going to win a huge amount of votes by pursuing such a policy, and, if you have a few billion pounds to bribe people with, then there are probably much better ways to spend it.
Whatever we may think about what is being discussed within Government or what we might like them to be considering, we have to focus on the facts.
There is no credible suggestion that IHT is going anywhere, there was no change at all in the Autumn Statement (which extends a very welcome 6-years-and-counting period of stability in the IHT regime) and, let’s be honest, the Conservatives don’t stand too much chance of winning the next election in any case and I can’t imagine Labour will change the current IHT position (in fact, their last ‘on the record’ comment on the issue suggests they would make it worse and not better).
As such, the only message we can take from all of this is keep calm and carry on!
