Widows 'penalised' by inheritance tax changes

The government is under pressure from campaigners to review new clauses on inheritance tax which could leave families facing bigger inheritance tax bills.

According to the Low Incomes Tax Reform Group (LITRG), widows and widowers whose spouses died at a young age stand to lose due to the clauses in the laws.

For those whose partners died before April 1975, "nil rate tax allowance" is not applicable and the campaign group feels it is unfair, reports the Daily Express.

The nil rate band, which currently stands at £312,000, is the amount of the estate on which there is no inheritance tax to pay, and if the property's value is less than the nil rate band, no tax is required.

Following the change of the rules in October 2007, the property of a spouse or civil partner who died after April 1975 is entitled to an extra exemption.

John Whiting of the LITRG said: "What is consistent and fair about denying this new relief to a widow whose spouse died in 1969 but allowing it to another widow whose husband died in 1976?"