Official figures have revealed that HMRC collected a ‘record amount’ of inheritance tax (IHT) in the 2017/18 tax year.
IHT receipts totalled £5.2 billion in 2017/18, the data showed – a rise of 8% when compared to the amount collected in 2016/17.
It also revealed that the total number of UK estates liable to IHT has increased every year since 2009/10.
The official data contains information on IHT receipts, estates that pay IHT, IHT tax reliefs and exemptions and the asset composition of estates left on death.
IHT is payable at 40% on any part of an estate that is worth more than £325,000 at the time of death (the ‘nil-rate band’). The tax may not be payable in some circumstances, for example in the case of business assets; most gifts given between spouses and civil partners; and assets given as gifts while the deceased was alive (as long as they lived for seven years after giving the gift, or certain anti-avoidance provisions don’t apply).
Commenting on the data, Steve Webb, Director of Policy at insurers Royal London, said: ‘The amount of money raised from IHT has doubled in less than a decade, and a steadily rising proportion of estates are now caught within the IHT net.
‘Even the introduction of an additional nil-rate band for families passing on a home to their children was not able to stem the growth in IHT revenues. Yet the tax remains complex and riddled with anomalies.’
As your accountants, we can help you to minimise the IHT due on your estate. Please contact us for more information.