Page 9 - Budget Newsletter November 2022

Previous announcements remaining in force

Both nil rate bands were frozen in 2021/22 and were due to remain frozen until the end of
2025/26. The main nil rate band has been subject to repeated freezes – it was set at

£325,000 in April 2009 and would be over £460,000 in 2023/24, had it been index-linked.

Planning point
2022 has not been the best of years for many investments, with values falling in the wake

of surging inflation and rapidly increasing interest rates. However, there is an upside to
the bad news for inheritance tax (IHT) planning. Now could be a good time for making

lifetime gifts of some of your investments because:

• The depressed values mean more can be gifted without creating a capital gains tax
liability.
• The beneficiary of your gift will gain from any recovery in value, but only the original

gift will count for IHT purposes.
• If the gift is outright, there is no immediate IHT and none at all if you survive for the

following seven years.
• In many instances, gifts that are not outright – for example using trusts – can also

escape immediate or future IHT.

The current IHT rules for lifetime gifts are not well understood and are surprisingly

generous. How long they will last after the next election is open to speculation.

Stamp Duty Land Tax

No further immediate changes were made to Stamp Duty Land Tax (SDLT) which applies
only in England and Northern Ireland. However, the Chancellor did announce that the
reductions made in the September ‘mini-Budget’ would be reversed from 1 April 2025.

Raymond James Budget Newsletter November 2022 8