The amount of inheritance tax collected by the government has risen steadily over the last five years; 2018/2019 saw a 3.1 per cent increase to £5.4 billion.
In the last year, there were around 270,000 families paying inheritance tax, with an average bill of almost £200,000. This is significantly higher than the average five years ago of £141,000.
The introduction of the residence nil rate band in 2007, which provided a tax exemption for passing on the family home to the next generation, appears to have has little effect on the overall amount of taxes collected.
Inheritance tax is not just payable on death; in the last tax year approximately 5,000 people paid inheritance tax whilst they were still alive. These payments are often a result of individuals making gifts into trusts.
Katy Burgin, wills and probate solicitor explains: “There are exemptions from inheritance tax that can be utilised both during an individual’s lifetime and on death. It’s important to get expert advice, not only to ensure the amount of inheritance tax payable is minimised but also to ensure the information provided to HMRC is accurate and submitted within the appropriate deadline to avoid penalties.”
If you would like advice on any aspect of inheritance tax, trusts, wills or probate, please contact our friendly team on 01302 320621.