Chancellor Rishi Sunak is said to be considering a wide range of tax reforms and increases amid the ongoing pandemic and subsequent recession. Ahead of his Budget announcement in March, tax rises are reportedly around the corner, with the self-employed seemingly likely to bear some of the burden. But there are also a number of wealth taxes that could be hiked, according to experts, who warned inheritance tax reforms could lead to bills on gifts. As Yahoo Finance claimed last month, the Potentially Exempt Transfer (PET) regime is set for review.

It currently allows individuals to make gifts of unlimited value to friends and family members without being hit with any inheritance tax liabilities if you live for a further seven years.

Debbie Wilson, a director at tax advising firm Hillier Hopkins, said this could be changed.

She said: “We can expect change in 2021, perhaps with an immediate inheritance tax charge on such gifts.

“It would be an easy change to make, facing limited opposition and could quickly be introduced.”

Julia Rosenbloom, a partner and Smith and Williamson and tax adviser, made a similar claim in November.

She predicted that PETs will be abolished, and recommended that people make gifts sooner rather than later to avoid extra charges.

Ms Rosenbloom wrote for Your Money: “This could be replaced with an immediate lifetime inheritance tax charge upon making the gift.

“If the recommendations made by the APPG (the All-Party Parliamentary Group for Inheritance and Intergenerational Fairness) in their report released in January are taken on board, that could mean a rate of 10-20 percent where a gift exceeds £30,000.

“So, if you’re thinking of making a substantial gift, it would be advisable to consider doing it sooner rather than later. Action taken in anticipation of changes does, however, involve significant risk as changes may not be introduced as expected.”

Funds recovered from the 40 percent levy on inheritance tax dropped by £200million (£5.4billion-£5.2billion) in 2019-2020 from the previous year.

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“But he was back a week later with the furlough scheme, it was smart, quick, some people lost out when they shouldn’t have done.

“Now Sunak’s obsession with debt is kicking in again.

“If he opts for austerity and tax hikes, then frankly we are heading for depression rather than a recession.”

Recent Bank of England data has put the 2020 economic slump at 10 percent, similar to the 9.7 percent decline seen in 1921.

GDP (gross domestic product) plunged just after the first lockdown was introduced, falling by 25.6 percent between last January and April.

The Bank of England has said that the UK’s GDP will not return to pre-pandemic levels until 2022.

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