Reeves urged to abolish the £175,000 residence nil-rate band

The Chancellor is facing pressure to eliminate the £175,000 residence nil-rate band in her upcoming Budget. Rachel Reeves previously argued that this allowance, which costs around £2bn annually, primarily benefits the wealthy and now the Resolution Foundation is pushing her to scrap it. In 2011, she stated: “Raising the inheritance tax limit to £1m for couples will do nothing for the vast majority of ordinary families.” The current system allows individuals to shield £500,000 from inheritance tax and couples can share their allowances. So, if the residence nil-rate band was scrapped a married couple with a £800,000 home and £200,000 worth of other assets only be able to pass on up to £650,000 of wealth before incurring a 40% charge, costing their family £140,000. The Resolution Foundation said Reeves could introduce a 20% and 30% inheritance tax rate, with 40% reserved for estates worth over £1.5m to soften the blow to middle class families.

 

 

The Daily Telegraph  

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