HMRC collected a record £4.56bn in Inheritance Tax (IHT) in 2015/16, a 21% increase in IHT payments from the previous year and an enormous 70% increase since 2010/2011.
The reason for this substantial jump has been put down to the increase in the values of assets left in estates, while the IHT threshold has remained at £325,000 since 2009.
As the threshold hasn’t increased for seven years it means more and more ‘ordinary’ families are now liable to pay IHT. However, changes to legislation will be introduced next year which will mean that individuals passing on their main home to direct descendants will have their IHT allowance increased by £100,000, rising to an additional £175,000 by 2020.
These increases will gradually bring the threshold to £1m for married couples and civil partners. However, couples without children and individuals who have never owned their own property will not see the same benefits.
Calculating IHT and other taxes can be a time consuming and complex process. Along with the general administration required when dealing with an estate, this adds yet another burden which the family is legally liable for.
We work in partnership with an estate administration provider Kings Court Trust who can remove the stress and take on full legal liability for administering an estate. If you would like to find out more please contact us.