Tax grab from grieving spouses feared

RACHEL Reeves is considering imposing inheritance tax on grieving husbands and wives in a potential £15.5billion raid, an expert warned.

- Robert Kellaway

Under current rules the entire estate of a person can be left free of the death duty to their spouse in what is the largest exemption on the books.

Businesses, farmland, pensions and family homes worth up to £1million are also tax free but are all under threat as the Chancellor prepares to grab billions from taxpayers.

Sarah Coles, head of Personal Finance at Hargreaves Lansdown, said: "We understand that it is the exemptions to inheritance tax that are being most closely looked at. The largest of these is the spousal exemption. The figures show £15.5billion was transferred tax-free to spouses and civil partners during 2020-21.

"This makes it the largest IHT tax break on the books and a very tempting target for the Chancellor as even a small reduction in this exemption has the potential to raise a lot of revenue.