Recent figures published by HMRC show Inheritance Tax (IHT) receipts reached a record £5.4 billion for the 2018/19 tax year.
The increase comes on the back of a 15% rise in the number of estates liable for IHT, with the average IHT bill reaching £179,000.
Rising asset values, particularly in regard to residential properties, has been a key factor behind the increased number of estates falling into the IHT net. The rise also reflects significant fiscal drag as the IHT threshold has remained at £325,000 since 2009.
The residence nil-rate band (RNRB) came into effect in 2017 and gives an additional allowance to people leaving their family home to direct descendants, such as children or grandchildren. The amount of the RNRB is £150,000 for 2019/20, rising to £175,000 for 2020/21. However, the introduction of the RNRB does not appear to have halted the rise in IHT receipts.
Craig Walker, Senior Tax Manager at Hawsons, commented: “Inheritance tax receipts have rocketed in recent years due to the freezing of the IHT allowance and rising asset values.”
“As the total amount collected hits a record high, so does the value of careful IHT tax planning. Taking proactive advice is essential to mitigate exposure and to increase the amount that loved ones will receive.”
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Whatever your age or the size of your potential estate, Hawsons can advise steps you can take to mitigate your Inheritance Tax exposure, through lifetime transfers of assets and tax efficient structuring of Wills.
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