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Inheritance Tax Haul Hits Record High as Threshold Freeze Bites | City A.M.

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The UK government collected a record £7.1 billion in inheritance tax receipts between April 2025 and January 2026, according to official figures released by Her Majesty’s Revenue and Customs (HMRC). This represents a £100 million increase compared to the same period last year, driven by a prolonged freeze on tax thresholds and rising asset values.

The current inheritance tax threshold, set at £325,000 since 2009, has remained unchanged despite significant inflation and increases in property and stock market values. This “fiscal drag” has pulled an increasing number of estates into the 40% tax bracket, contributing to the record intake. A further allowance of £175,000 exists for households inheriting a main home.

The surge in receipts precedes the full implementation of changes to inheritance tax announced by Chancellor Rachel Reeves in the 2024 Budget. These reforms, largely scheduled to take effect in April 2026, eliminate several long-standing exemptions previously enjoyed by farms, family-owned businesses, and investments in companies listed on the junior stock market, AIM. Perhaps the most significant change is the inclusion of pension savings within the scope of inheritance tax, beginning in April 2027.

Mike Winstanley, director of wealth management at Bentley Reid, stated the figures demonstrate a clear trend for future inheritance tax revenues. “For clients, the impact is increasingly material,” he said. “Inheritance tax at 40 per cent is not marginal; it meaningfully alters the intergenerational transfer of wealth. Where an estate sits at £3–5 million, the tax liability can comfortably exceed £1 million without structured planning in place.”

Rising asset prices have also played a role in boosting inheritance tax receipts. The FTSE 100 has increased by 38% since the start of 2024, while the S&P 500 has risen by 43%, fueled by growth in the technology and artificial intelligence sectors. House prices have also continued to climb, albeit at a slower rate than equities.

Amit Joshi, managing director of wealth at Mattioli Woods, highlighted a lack of public awareness surrounding inheritance tax. “What is most concerning isn’t the tax itself, but the lack of awareness. Families often only realise the impact when it’s too late to act. Inheritance tax has become a planning issue by stealth, and the cost of inaction is measured in lost choices, rushed decisions, and unnecessary tax.”

On February 20, 2026, a trailer for ‘Toy Story 5’ was released, scheduled for theatrical release on June 19, according to a post on X (formerly Twitter) by tobyfox. This event occurred alongside the release of the HMRC inheritance tax figures and reports of the death of actor Eric Dane at the age of 53 following a diagnosis of ALS, as reported by DiscussingFilm and PopBase on X.

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News

Super-Rich Inheritance Tax Initiative Falters: Assessing Economic and Social Implications

by James Carter Senior News Editor
written by James Carter Senior News Editor

Switzerland Rejects Inheritance Tax for the Super-Rich

Table of Contents

November 30, 2025

In a decisive vote, Switzerland has turned down a proposal for an inheritance tax aimed at the wealthiest citizens. The referendum results, released on Sunday, showed a clear opposition to the tax, alongside a rejection of a citizen service initiative. This decision reflects a broader debate about wealth distribution and social policies within the country.

Referendum Results: A Clear ‘No’

The Swiss population voiced its stance with a strong “no” to both key proposals. The citizen service initiative was rejected by 84.2% of voters. The inheritance tax proposal, which targeted the super-rich, was turned down by 78.3% of the electorate.

Details of the Rejected Inheritance Tax

The initiative, put forward by the Young Socialists, suggested a 50% tax on assets exceeding 50 million swiss francs (approximately 54 million euros). The revenue generated was intended to fund climate change initiatives and economic restructuring. Though,this proposal faced significant opposition.

Opposition and Concerns

A coalition of political parties and business groups actively campaigned against the tax. Their primary concern was that such a high tax rate could prompt wealthy individuals to relocate, potentially leading to a decrease in overall tax revenue for Switzerland. This concern played a significant role in swaying public opinion.

Current Inheritance Tax Landscape

Its crucial to understand the current situation. In most Swiss cantons (states), direct descendants and spouses are exempt from inheritance taxes. Other heirs are subject to varying regulations depending on the specific canton.

Citizen Service Initiative

Alongside the inheritance tax proposal, voters also rejected a citizen service initiative. This initiative had suggested mandatory service, either in the military or in civil roles like disaster relief, education, health, or social services.Currently, only men are subject to compulsory military conscription, with options for alternative community service.

Political Reactions

The government and the majority of parliamentary parties opposed the citizen service initiative, citing potential labor market disruptions and high costs. While the Green-Liberal Party (GLP) and the Evangelical People’s Party (EPP) supported the service,they were in the minority. One GLP parliamentarian acknowledged the voters’ choice,but expressed a commitment to the cause,suggesting it might have been proposed “ten years too early.”

Swiss flag

The rejection of the inheritance tax in Switzerland highlights the ongoing global conversation surrounding wealth distribution and taxation policies. It underscores the challenges governments face when implementing significant tax changes and the importance of considering the potential impact on the economy and individual behavior.

Evergreen Insights: Inheritance Tax Trends

Globally, inheritance tax policies vary widely. Some countries have abolished them, while others maintain high rates. The trend often reflects a balance between revenue generation, social equity, and economic competitiveness. Understanding these nuances is key for any investor.

Did you Know?
Switzerland’s stance is not unique. Other nations have also grappled with similar debates,leading to diverse outcomes in tax legislation.

Pro Tip:
Consult with financial advisors to understand the implications of inheritance tax laws in specific jurisdictions.

Frequently Asked Questions

What was the primary focus of the Swiss referendum?

The referendum addressed both a proposed citizen service and a new inheritance tax.

Who proposed the inheritance tax initiative?

The Young Socialists were behind the inheritance tax proposal.

What was the proposed tax rate?

The proposed tax rate was 50% on assets over 50 million francs.

What were the main concerns about the inheritance tax?

Opponents feared wealthy individuals would leave the country.

Who is currently exempt from inheritance tax in most Swiss cantons?

Spouses and direct descendants.

What are your thoughts on this decision? Share your comments below!

What are the potential consequences of failing to address wealth inequality through tax policy, referencing ancient examples like the EGTRRA?

super-Rich Inheritance Tax Initiative Falters: Assessing Economic adn Social Implications

The Demise of the “Heir Tax” – A Political and Economic Overview

The proposed “Solidarity Trust for Future Generations” – colloquially dubbed the “heir tax” – aimed to considerably increase taxes on inheritances exceeding $50 million. After months of heated debate and legislative roadblocks, the initiative officially failed to pass the Senate on November 28th, 2025. This outcome has sparked considerable discussion regarding wealth inequality, estate planning, and the future of tax policy.This article delves into the reasons for the initiative’s failure and analyzes the potential economic and social ramifications. Key terms related to this include inheritance tax, estate tax, wealth tax, tax policy, and wealth distribution.

Why Did the initiative Fail? – Political Roadblocks and Opposition

Several factors contributed to the downfall of the super-rich inheritance tax.

* Bipartisan Opposition: While championed by progressive Democrats, the initiative faced resistance from both sides of the aisle.Moderate Democrats expressed concerns about potential capital flight and the impact on family businesses. Republicans uniformly opposed the measure, framing it as a punitive tax on success and a violation of property rights.

* Lobbying Efforts: Intense lobbying campaigns funded by wealthy individuals and organizations actively worked against the bill. These efforts included targeted advertising, direct communication with lawmakers, and the dissemination of economic impact studies predicting negative consequences. Tax lobbying played a significant role.

* Constitutional challenges: Opponents threatened legal challenges, arguing the tax violated constitutional provisions related to equal protection and due process. The potential for lengthy and costly court battles further deterred support.

* Economic Uncertainty: Concerns about a slowing economy and potential recession amplified anxieties about the impact of increased taxes on investment and economic growth. Economic impact of taxes was a central argument.

economic Implications: Modeling the Potential Effects

The failure of the initiative has significant economic implications. Proponents argued the tax would generate significant revenue, funding crucial social programs and reducing the national debt. Opponents countered with predictions of negative economic consequences.

* Revenue Projections: The Congressional Budget Office (CBO) initially estimated the tax would generate approximately $300 billion over ten years.This revenue was earmarked for investments in education, healthcare, and infrastructure. Government revenue and fiscal policy are key considerations.

* Capital Flight: A primary concern was that the tax would incentivize wealthy individuals to move their assets – and themselves – to countries with more favorable tax regimes. This capital flight could reduce the tax base and harm domestic investment.

* Impact on Family Businesses: Opponents argued the tax would force family businesses to sell assets or restructure to avoid hefty tax liabilities, possibly leading to job losses and economic disruption. Small business taxation became a focal point.

* Investment and Innovation: Some economists predicted the tax would discourage investment and innovation, as wealthy individuals would have less capital available to fund new ventures. Investment incentives were debated extensively.

Social Ramifications: Wealth Inequality and Chance

Beyond the economic considerations, the initiative’s failure has profound social implications, particularly concerning wealth inequality and opportunity.

* Exacerbating Wealth Disparity: The tax was intended to address the growing gap between the wealthiest Americans and the rest of the population. It’s defeat reinforces existing patterns of wealth concentration.Wealth inequality remains a critical issue.

* Intergenerational Wealth Transfer: Without the tax,substantial wealth will continue to be passed down through generations,perpetuating existing advantages and limiting opportunities for those from less privileged backgrounds. Intergenerational mobility is directly affected.

* Fairness and Social Justice: Proponents argued the tax was a matter of fairness, asserting that those who inherit vast fortunes have a duty to contribute to society. The initiative’s failure raises questions about the principles of social justice and tax fairness.

* Public Perception and Trust: The outcome may further erode public trust in government and exacerbate feelings of resentment towards the wealthy elite. Public opinion on taxation is increasingly polarized.

Case Study: The 2001 Estate Tax Reduction and its Long-Term Effects

Examining the effects of the 2001 Economic Growth and Tax Relief Reconciliation Act (EGTRRA), which significantly reduced estate taxes, provides valuable context. While intended to stimulate the economy, studies have shown the EGTRRA primarily benefited the wealthiest families, contributing to increased wealth concentration. A 2018 study by the Urban Institute found that the tax cuts had a minimal impact on economic growth but significantly increased wealth inequality. This historical precedent highlights the potential long-term consequences of maintaining low estate taxes. Estate tax history provides crucial insights.

Alternative Approaches: Exploring Othre Wealth Tax Options

With the inheritance tax initiative defeated, policymakers are exploring alternative approaches to address wealth inequality and generate revenue.

* Annual Wealth Tax: A proposed annual tax on the net worth of the wealthiest individuals, regardless of inheritance.

* Increased Capital Gains Tax: Raising the tax rate on profits from the sale of assets, such as stocks and real estate.

* Strengthening the Existing Estate Tax: Increasing the estate tax rate and lowering the exemption threshold.

* **closing

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Economy

Protecting Your Children: Strategies to Mitigate Future Inheritance Tax in Ireland

by Daniel Foster - Senior Editor, Economy
written by Daniel Foster - Senior Editor, Economy

Navigating Inheritance Tax with Section 72 Policies

Table of Contents

many individuals are concerned about the potential impact of inheritance tax on their estates, particularly when assets exceed tax-free thresholds. While frequently enough perceived as a meaningful burden, Revenue data indicates that inheritance tax – officially Capital Acquisitions Tax – affects a relatively small proportion of households. In 2020, just over one-third of households received an inheritance exceeding €3,000, and even among the wealthiest 20%, the median inheritance remained below the then-threshold of €335,000. Last year, the tax generated just 0.7% of Revenue’s total tax take, amounting to €861.9 million.

However, for families with considerable estates, the 33% tax rate can represent a considerable financial challenge. Fortunately, a specific financial instrument exists to mitigate this liability: the Section 72 policy.

What is a Section 72 Policy?

Named after Section 72 of the Capital Acquisitions Tax Consolidation Act 2003, these policies are designed to cover the cost of inheritance tax due after a parent’s death. Crucially, the policy must be taken out by the estate owner (your parents, in this case), not the beneficiaries. While children can contribute to the premium payments – potentially utilizing the €3,000 small gift exemption – the policy ownership remains with the estate owner.

Is it Worth Considering?

The value of a Section 72 policy hinges on the size of the estate and the desired outcome. It’s particularly useful for families wishing to preserve assets like a valuable family home, preventing its sale to cover tax liabilities.However, if a significant portion of the estate is already earmarked for one beneficiary, the

What is the current CAT tax-free threshold for gifts and inheritances to children in Ireland?

Protecting Your Children: strategies to Mitigate Future Inheritance Tax in Ireland

Understanding Irish Inheritance Tax (CAT)

Inheritance tax in Ireland, officially known as Capital Acquisitions Tax (CAT), can considerably reduce the value of assets passed on to your children. Currently, the CAT tax-free threshold for gifts and inheritances to children is €335,000. Above this, tax applies at 33%. Understanding these thresholds is the first step in effective inheritance planning Ireland. It’s crucial to remember that CAT applies to both gifts received during your lifetime and inheritances received after your death. Terms like estate tax Ireland are often used interchangeably, though CAT is the official designation.

Gifting Strategies: reducing your Estate’s Value

Proactive gifting is one of the most effective ways to reduce your future CAT liability. Here’s how:

* Annual Gift Exemption: You can gift up to €3,000 per year to each child without triggering CAT. This is a powerful tool for gradually transferring wealth.

* Small Gift Exemption: Gifts of up to €3,000 from any individual to any beneficiary are exempt from CAT.This can be used in conjunction with the annual exemption.

* Gifts for Education/Marriage: Gifts specifically for a child’s education or marriage benefit from higher tax-free thresholds.Gifts towards education are exempt up to a lifetime limit, while marriage gifts have a separate, ample threshold. Documenting the purpose of the gift is vital.

* Regular Gift Pattern: Establishing a consistent gifting pattern demonstrates intent and can be beneficial if challenged by revenue.

Utilizing Trusts for Inheritance Tax Planning

Trusts offer a sophisticated approach to inheritance tax mitigation. They allow you to transfer assets into a trust,which is then managed by trustees for the benefit of your children.

* Discretionary Trusts: These provide flexibility, allowing trustees to decide how and when benefits are distributed to beneficiaries. This can be especially useful for managing assets for children who may not be financially responsible.

* Interest in Possession Trusts: these provide a beneficiary with the right to receive income from the trust assets.

* Nil-Rate Band Trusts: Designed to utilize your CAT tax-free band efficiently.

* Trust Considerations: Setting up and maintaining a trust involves legal fees and ongoing administration costs. Professional advice is essential. The rules surrounding trusts and CAT are complex and subject to change.

Life Assurance as an Inheritance Tax Solution

A life assurance policy can provide funds to cover potential CAT liabilities, ensuring your children aren’t forced to sell assets to pay the tax.

* Section 789 Policies: Specifically designed for inheritance tax planning, premiums are not tax-deductible, but the benefit is paid directly to Revenue to cover the CAT liability.

* Whole of Life Policies: provide lifelong cover and a guaranteed benefit.

* Term Life Policies: Offer cover for a specific period and are generally more affordable.

* Policy Ownership: Careful consideration should be given to who owns the policy (you or your children) as this can have tax implications.

Property and Inheritance Tax: Specific Considerations

Property often represents a significant portion of an estate. Here’s how to address CAT implications related to property:

* Gifting Property: Gifting a portion of your property to your children can reduce the value of your estate.however, be aware of potential stamp duty implications.

* Joint Ownership: adding your children to the property deed as joint owners can facilitate a smoother transfer of ownership, but it can also trigger immediate CAT implications depending on the percentage gifted.

* Family Farm relief: Specific reliefs are available for farmers transferring their farms to the next generation. Strict conditions apply.

* Business Relief: Similar reliefs exist for business owners transferring ownership of their businesses.

The Importance of Professional Advice

Tax planning for inheritance Ireland is a complex area. Seeking advice from a qualified solicitor, accountant, or financial advisor is crucial. They can:

* Assess your individual circumstances.

* Develop a tailored inheritance plan.

* Ensure compliance with current tax legislation.

* review and update your plan as your circumstances change.

Real-World Example: The O’Connell Family

The O’Connell family, with a combined estate value exceeding €800,000, proactively engaged a financial advisor. By utilizing the annual gift exemption over a ten-year period, gifting funds towards their children’s education, and establishing a discretionary trust for a portion of their assets, they successfully reduced their potential CAT liability by an estimated €40,000. This allowed their children to inherit a significantly larger portion of the estate without facing a substantial tax burden.

Key Takeaways & Practical Tips

* Start Early: The sooner you begin planning, the more options you have available.

* Keep Accurate Records: Maintain detailed records of all gifts made, including dates, amounts, and the purpose of the gift.

* Review Regularly: Tax laws change

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News

High Net Worth Individuals Prepare Estate Changes in Anticipation of Inheritance Tax Overhaul, Shifts from Virtual Assistant Roles to Content Writing for Tax Efficiency

by James Carter Senior News Editor
written by James Carter Senior News Editor

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Wealthy Families Brace for Inheritance Tax Overhaul

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Concerns are rising among high-net-worth individuals regarding potential changes to Inheritance Tax, as the government prepares its upcoming Budget.

London, United Kingdom – Affluent clients of leading wealth management firms are proactively adjusting their estate plans amidst growing anticipation of meaningful alterations to the United Kingdom’s Inheritance Tax (IHT) regulations. Whispers of a potential fiscal tightening by the Chancellor are fueling these preemptive moves, as the Treasury seeks to address a substantial £30 billion funding gap.

Rathbones, a prominent wealth manager, reported a substantial surge in inquiries related to inheritance planning, with 43 percent of clients possessing £5 million or more in investable assets anticipating the need for advice within the next year. This heightened interest coincides with a series of leaks suggesting Chancellor rachel reeves is contemplating measures to bolster public finances by targeting wealth accumulation.

The Treasury is reportedly evaluating options to restrict the amount individuals can gift to family members during their lifetime without incurring IHT liabilities. Currently, gifts made seven years or more before death are exempt, while those made between three and seven years are subject to a sliding scale of taxation known as ‘taper relief.’

Furthermore, plans are underway to incorporate pensions into the scope of Inheritance Tax, slated for implementation in April 2027. This would subject unused pension funds and death benefits to the standard IHT rate.

Potential Changes to Inheritance Tax

Simon Bashorun, Head of Advice at Rathbones Private Office, emphasized the uncertainty surrounding these rumored changes, stating that the speculation itself poses challenges for financial planning. “Clients are understandably keen to get ahead of any potential changes, notably around inheritance tax, gifting, and retirement planning,” he said.

These considerations arise following a previous attempt by the Treasury to revise the wealth levy, which faced considerable opposition and protests due to its impact on family farms and businesses. Earlier proposals included removing exemptions for agricultural and business assets.

Bashorun noted that clients with substantial pension pots are actively reassessing their long-term strategies in light of the evolving tax landscape. “Since the significant changes to the inheritance tax (IHT) regime in the last Budget,speculation has continued to swirl,” he added.

Did You Know? According to data from the Office for National Statistics, total UK wealth reached £15.4 trillion in 2023, with a significant portion held in pensions and property.

Understanding Inheritance Tax Brackets

Here’s a table summarizing the current inheritance Tax rates in the UK (as of september 24, 2025):

Estate Value Tax Rate
Below £325,000 0%
£325,001 to £650,000 40%
Over £650,000 40%

Long-Term Estate planning considerations

Estate planning is a continuous process, not a one-time event. it’s crucial to regularly review and update your plans to reflect changes in your financial circumstances,family dynamics,and tax laws.

Key strategies to consider include:

  • Gifting: Utilizing annual gift allowances and making larger gifts strategically, taking into account the seven-year rule.
  • Trusts: Establishing trusts to protect assets and manage their distribution according to your wishes.
  • Life Insurance: Utilizing life insurance policies to cover potential IHT liabilities.
  • Pension Planning: Optimizing pension arrangements to maximize tax efficiency.

Frequently Asked Questions About Inheritance Tax

  1. What is Inheritance Tax? Inheritance Tax is a tax levied on the value of a person’s estate upon their death,exceeding a certain threshold.
  2. What is the current Inheritance Tax threshold? As of September 2025, the standard Inheritance Tax threshold is £325,000.
  3. Can I reduce my Inheritance Tax liability? Yes, there are several strategies available, including gifting, establishing trusts, and utilizing life insurance.
  4. Will pensions be subject to Inheritance tax? From april 2027, unused pension pots and death benefits will be subject to Inheritance Tax.
  5. What is ‘taper relief’ in relation to Inheritance Tax? Taper relief applies to gifts made between three and seven years before death, with the tax rate decreasing as the time since the gift increases.
  6. How can I get expert advice on Inheritance Tax? Consulting with a qualified financial advisor or estate planning attorney is recommended to develop a personalized strategy.
  7. What impact do recent budget leaks have on Inheritance Tax planning? Recent leaks suggest potential changes to gifting rules and the inclusion of pensions, prompting proactive estate planning adjustments.

Share your thoughts: Do you think the government is justified in targeting wealth for fiscal purposes? What steps, if any, are you taking to review your own estate planning?

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