Publications featured in include: Financial Times and The Daily Express
The impact of the Covid-19 pandemic and record high property prices have seen a larger than usual number of estates become liable for Inheritance Tax. Since the value of the deceased’s home typically makes up the majority of the average estate, this large rise has impacted inheritance tax bills.
In addition, the Government has failed to increase the tax-free allowance on inheritance in line with inflation. The rate has been frozen at £325,000 since April 2009. If the inheritance tax allowance had risen in line with prices, the threshold would be £439,000 today.
In future, even more estates are likely to be caught by IHT as the Government plans to keep the level at which people start paying the tax frozen until at least 2026.
There is also speculation that the Treasury will increase IHT rates in forthcoming budgets as the Government looks to reduce borrowing following the pandemic. This would mean families forking out an ever-greater share of their inheritance to HMRC.
Mark Giddens, Partner in our London office says, “Inheritance Tax is becoming ever-more lucrative for HMRC, as the latest figures show.”
“A tax that was original supposed to affect only the super-rich is increasingly hitting middle England. As a result, families increasingly understand the importance of tax planning to ensure they can pass the fruits of their labour to their children.”
“The pandemic has led to record peacetime borrowing, and the Treasury will be looking to balance the books any way it can.”
