Inheritance tax (IHT) revenue has reached a record high at an annual total of £5 billion compared to the previous tax year when approximately £4.7 billion was collected, representing a 9% increase.
One reason for this increase is due to the fact the IHT threshold of £325,000 has remained the same since 2010 despite the increase in house prices. As such, more people are affected by the tax. According to statistics from the Office of Budget Responsibility, the number of estates where inheritance tax is due has grown from around 10,000 to over 40,000.
What’s more, the cost of moving and the lack of suitable housing for retired people means many are choosing not to downsize their home resulting in them having to pay more inheritance tax.
Further, in April 2017, the New Residence Nil-Rate Band was introduced, increasing the current IHT threshold to £425,000 for individuals who are passing on their main residence to direct descendants. While this change is designed to allow middle income families to pass down their home, those who do not have children or grandchildren may still face a high inheritance tax bill.
Having an inheritance tax efficient Will can help ensure the minimum amount of inheritance tax is payable by your estate. Stephensons offers advice appointments on inheritance tax planning and taking professional advice could lead to significant inheritance tax savings.
If you would like further details on how we may be able to assist you, please do not hesitate to contact our Wills and probate team on 0175 321 6399.
By Caroline Rigby, graduate paralegal in the Wills and probate team