Inheritance tax rolls onwards and upwards

Inheritance tax rolls onwards and upwards

The unloved tax is generating a rapidly rising income for the Government.

The inheritance tax (IHT) nil rate band has been frozen at £325,000 since 6 April 2009 and measures in this year’s Finance Bill will maintain that freeze until at least 5 April 2018. Such a prolonged freeze is inevitably dragging more estates into the IHT net and increasing the IHT paid.

The Office for Budget Responsibility projects that the tax will raise almost 75% more for the Exchequer in the final year of the freeze than it did in 2012/13.

The inheritance tax (IHT) nil rate band has been frozen at £325,000 since 6 April 2009 and measures in this year’s Finance Bill will maintain that freeze until at least 5 April 2018. Such a prolonged freeze is inevitably dragging more estates into the IHT net and increasing the IHT paid. The Office for Budget Responsibility projects that the tax will raise almost 75% more for the Exchequer in the final year of the freeze than it did in 2012/13.

If you have not reviewed your estate planning in recent years, you could be surprised at the slice of your wealth destined to disappear in IHT rather than pass to your children or grandchildren. 40% of today’s house price rise could be tomorrow’s IHT bill.

Fortunately there remain a variety of planning opportunities that can help you reduce the impact of IHT. As is so often the case, the sooner you can start planning, the better. Why not arrange for an initial discussion with us to assess your IHT liability and the options open to you?

If you have any questions, please feel free to contact us on 020 7614 1000 or info@helmgodfrey.com.

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The Financial Conduct Authority does not regulate tax and trust advice. The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.