Landlords in Scotland may face higher inheritance tax bills should the government introduce changes in its forthcoming Budget. This warning comes from David Alexander, chief executive of DJ Alexander, an estate and lettings agency.
Mr Alexander suggests that any reforms aimed at increasing government revenue could lead to property owners paying more. He notes that rising house prices have already brought more people into the scope of inheritance tax.
The inheritance tax nil-rate band of £325,000 has been frozen since 2009 and is scheduled to stay at this level until 2031. Mr Alexander estimates that this threshold would be £538,414 if it had kept pace with inflation.
Inheritance tax receipts totalled £7.03bn in 2023/24, marking a 5% increase from the previous year. The Office for Budget Responsibility forecasts these receipts to reach £9.1bn in 2025/26 and £14.5bn by 2030/31.
Among the potential changes discussed, according to Mr Alexander, is replacing inheritance tax with a care levy of 10% on asset values. He also highlights the inclusion of pensions in inheritance tax assessments from April 2027, which is expected to bring an additional 50,000 estates into the tax.