Reeves blasted for an inheritance tax plot which is “turning grandparents into tax evaders”.
UK households warned over HMRC crackdown on ‘Bank of Mum and Dad’
New HMRC rules have been branded “daft” as Labour Party Chancellor Rachel Reeves is blasted for an inheritance tax plot which is “turning grandparents into tax evaders”.
The plan involves cutting the long-standing £3,000 annual tax-free gift allowance. Scott Gallacher, Director at Leicester-based Rowley Turton, said in a warning: “I can’t believe the Chancellor would be daft enough to cap family gifts.”
“All it would achieve is turning grandparents into overnight tax evaders, with cash gifts to children and grandchildren rocketing to avoid what many already see as an unfair tax,” the East Midlands-based personal finance expert went on to say.
READ MORE 7 money changes in September including £7,500 benefit for parents
Amid the speculation of the change, another finance expert, Benjamin Beck, a financial coach, said: “Family gifts can be the difference between affording a deposit, keeping up with bills, or accessing good education.
“Tightening the allowance risks cutting off this support at the very moment it is needed most. This will affect the many, not just the few – which is surprising considering Labour’s slogan is ‘for the many, not the few’.”
David Stirling, an adviser at Mint Wealth, has also spoken out amid the rumoured changes on IHT, describing the move as “a blatant attempt to tax the Bank of Mum and Dad”.
He added in a warning for UK households: “From everyday living expenses to help with property deposits, this support is essential. Reeves risks taxing the very transfers that hold families together.”
And Anita Wright, a chartered financial planner at Ribble Wealth, said of the move from HMRC and Ms Reeves: “Any move to clamp down on gifts risks hitting families at the very moment when intergenerational support is most vital.
“The key is to plan early and make use of existing allowances before they disappear. Beyond that, trusts, insurance and structured succession planning will be essential.”