Hart Shaw Business Recovery Services is warning people that they could face higher inheritance tax bills than they expected, after new research shows a significant increase in payments to the Treasury.
Recent analysis of tax figures for 2012/13 published by HM Revenue and Customs (HMRC) reveals that the cost of passing on wealth to the next generation had increased by three per cent in one year.
During this period – the latest for which figures are available – the British population paid more than £3 billion to the Treasury in inheritance tax (IHT), while the average death tax bill rose by almost £5,000 in a year to £170,000, despite the fact that only 17,900 (six per cent) of the 280,000 estates reviewed, actually ended up paying IHT.
As house prices continue to rise, more and more people are finding themselves liable for IHT, particularly those with more than one property or a property in a high-value area. However, all of this could be set to change following new IHT rules due to be introduced from April 2017.
Under the new rules, announced in the Chancellor’s Summer Budget, individuals will be entitled to a family home allowance, in addition to their existing individual £325,000 IHT allowance.
This new allowance will be phased in over the coming years and will allow married couples or those in civil partnerships to pass on a property worth up to £1m tax free by 2020/21.
For more information please contact Steve Vickers on 0114 251 8850 or firstname.lastname@example.org, or watch our video on Inheritance Tax Planning.
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