A new study suggests that the number of UK estates liable to pay Inheritance Tax (IHT) will rise by approximately 15 per cent by the end of 2017.
The research, recently highlighted by Moneywise, comes not too long after HM Revenue & Customs (HMRC) reported that IHT receipts hit a record high of £4.72bn in the 2015/16 financial year.
The current IHT nil rate band, or threshold above which IHT is incurred, sits at £325,000 – above which the tax is charged at a rate of 40 per cent of the estate’s value.
HMRC has said that the £325,000 nil rate band will remain frozen until at least 2019.
Meanwhile, rising property prices and inflation are pushing an increasing number of estates over the threshold, meaning that more and more UK families are likely to be hit with IHT in the coming years unless they seek estate planning advice from a specialist solicitor.
Changes due to take effect in April this year will enable some families to pass an additional £100,000 in property value to their children, grandchildren or other ‘eligible beneficiaries’ tax-free – but families will need to act quickly to review their Wills in order to ensure they will qualify for this additional saving, known as the new Residence Nil Rate Band (RNRB).
These statistics again illustrate the impact that IHT continues to have on families upon the death of a loved one and underline the importance of obtaining proper tax planning advice in relation to your estate and the arrangements you have in place.