Rachel Reeves is looking to tighten the rules around inheritance tax as she scrambles to fix Britain’s ailing public finances, according to reports.
The Chancellor is examining whether to harden the rules on the gifting of money and assets ahead of the Autumn Budget.
According to The Guardian, Treasury reforms could include a lifetime cap on funds that can be given away.
There may also be adjustments to the rate at which inheritance tax liability tapers in the seven years between a gift and death.
No decisions have reportedly been made and some in Whitehall claim there had been a lack of substantive talks at a senior level about the policy.
Ministers have been careful not to rule out future tax rises amid slowing economic growth, inflation being at 3.6% and unemployment at a four-year high, at 4.7%.
HMRC collected a record £6.7 billion in inheritance tax during the 2022/23 tax year, up 12% from the previous year.
Receipts are also expected to soar in the coming year as thresholds are frozen and Ms Reeves’s changes made last year take effect.
Number 11 controversially imposed a 20% rate on family businesses and farms worth more than £1 million.
She also made pension pots liable to death duties and extended a freeze on thresholds after claiming there's a £22 billion black hole left by the last Conservative administration.
Ms Reeves was previously understood to be in favour of imposing inheritance tax on overseas assets held by UK residents who held non-domicle status.
Currently, inheritance tax is levied at 40% on assets worth more than £325,000, although higher thresholds and exemptions apply for homes passed on to spouses.
Shadow Chancellor Sir Mel Stride said: “Those who have worked hard, saved and want to pass something on to their loved ones shouldn’t be punished by yet more taxes from Labour.
“Tax rises are coming to paper over the cracks of the chancellor’s economic mismanagement.”
