Published On: Sun, Jul 30th, 2017

INHERITANCE TAX SHOCK: Government rakes in £5BN record high from Britain's dead


Death duties pulled in a staggering £4.9billion for the tax man in the 2016/17 tax year.

And in the current 2017/18 tax year, inheritance tax receipts have already increased by 22 per cent.

Experts said the amount raked in from the death levy is now set to hit new highs this year.

The threshold for the controversial levy has been stuck at £325,000 since 2009.

At the same time, house prices have surged exposing more people to inheritance tax at a rate of 40 per cent.

From April this year, the allowance became more generous for higher value homeowners, helping people to pass on more of their wealth to loved ones.

An additional £100,000 of allowance can now be used to reduce the duty paid on a main home.

By 2020 this extra allowance is to rise to £175,000, meaning a couple could pass £1million of inheritance tax-free.

However, increases in stock markets, cash savings and inflation are helping to push more people into the inheritance tax bracket.

Danny Cox, chartered financial planner at Hargreaves Lansdown, said: “The Exchequer’s coffers continue to benefit from the booming housing market and rising asset values and despite the new tax break for the family home, IHT receipts are set to break records again this year.”

Families have now been urged to check estates and take steps to reduce the impact of inheritance tax.

Paul Wilson, chief executive at Avalon, said: “Inheritance planning can be incredibly complex: last wishes can change frequently and the legacy planning system in general desperately needs updating.

“People have to continually revisit their legal documentation and it can be all too easy to leave it, meaning steps that could have been taken to ease the financial burden are overlooked.

“Pair that with rising property values and a growing number of estates are being hit by inheritance tax.

“Older people in particular, having built up savings over their lifetime to pass on to family, face a substantial amount being collected by the government.”


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