Published On: Sat, Aug 26th, 2017

How to avoid Inheritance Tax: Expert warns HMRC to hit families HARDER this year


The taxman has raked in an extra six per cent year-on-year, according to the latest figures.

Almost £2billion has been taken from estates in three months alone, between April and July 2017.

It comes as HMRC has come under increased pressure over tax avoidance by large global companies.

The rise so-called death duty is down to the more aggressive approach by the taxman, according to Sean McCann, chartered financial planner at NFU Mutual.

He said: “It’s clear that the taxman is cracking down hard on inheritance tax by looking more closely at people’s estates and challenging claims for reliefs.

“When inheritance tax receipts rise, it’s usually because of a buoyant housing market.

“Now, with property prices stagnating, it’s difficult to see what could have caused such a sharp increase in receipts other than a more aggressive approach to inheritance tax.”

Families have been urged to take steps towards planning for the future and protecting wealth from the taxman.

Mr McCann added: “The extra scrutiny from tax officials means those who haven’t taken professional advice or planned early could be caught out. This could have a catastrophic effect on family wealth.

“IHT is one of the more complex taxes and there are plenty of traps to fall foul of – as many families appear be finding out.”

Inheritance tax is charged at rate of 40 per cent, on estates worth more than £325,000.

The government introduced a new Residents Nil Rate Band in April, helping to protect the main home by another £100,000.

However, rising house and asset prices means more families are set to be caught by the tax.

Fortunately, there are many ways to easily and legally avoid the duty.

Everyone has gifting allowances, and any wealth given away more than seven years before death is not liable for tax.


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