Budget 2021: Inheritance Tax and Pensions Frozen
The coronavirus pandemic has ripped a hole in the UK’s finances, and we all know that steps need to be taken to begin to set the UK on the right path once again, now there is light at the end of the lockdown tunnel.
Addressing Parliament, Chancellor Rishi Sunak, focused on the roadmap and the UK’s road to recovery on the back of the pandemic. He said:
“A year ago in my first budget, I announced the initial response to the coronavirus. what we thought was a temporary measure has changed the way we live our lives. Much has changed, but one thing has remained the same. I said I would do whatever it takes, I have done and I will continue to do so.”
He continued to talk about the impact the virus has had on the UK’s economy, and according to the Office for Budget Responsibility, the recovery is set to return to pre-covid levels more swiftly than previously expected due to the vaccine roll out.”
In fighting the pandemic, the UK government forecasts show borrowing at a record £355bn this year, next year this is expected to be £234bn. But it also needs to continue supporting the millions still out of work or on furlough due to the downturn. Protecting people’s jobs was high on the Chancellor’s agenda, as he announced support for self-employed workers and the extension of the current furlough scheme to the end of September 2021.
The wills and probate sector would have been waiting in anticipation for the Chancellor’s Budget today to see what impact it will have on the industry as a whole. Boris Johnson called it a “Budget for the recovery” at PM’s questions.
The Chancellor announced the following headline concessions in the 2021 budget:
- Inheritance Tax. The inheritance tax threshold will be frozen from next year until 2026.
- Pensions: The Pensions Lifetime Allowance will be maintained at £1,073,100 up to and including 2025-26. Pension rules will be changed, giving pension funds the flexibility to unlock billions of pounds to invest in innovative ventures