Inheritance Tax payments jump to record levels

HMRC collected a record £4.56bn in Inheritance Tax (IHT) in 2015/16. Recent data published by the Office of National Statistics (ONS) showed a 21.6% increase in IHT payments from last year and an enormous 70% increase since 2010/2011.  

The reason for this substantial jump has been put down to the increase in the values of assets left in estates, while the IHT threshold has remained at £325,000 since 2009. There was also a rise in the number of deaths between December 2014 and March 2015, which was significantly higher than the same period in the previous year.

As the threshold hasn’t increased for seven years it means more and more ‘ordinary’ families are now liable to pay IHT.  However, changes to legislation will be introduced next year which will mean that individuals passing on their main home will have their IHT allowance increased by £100,000, rising to an additional £175,000 by 2020. 

These increases will gradually bring the threshold to £1 million for married couples and civil partners.  However, couples without children and individuals who have never owned their own property will not see the same benefits.

Tom Curran Chief Executive estate administration specialist Kings Court Trust said: “IHT is no longer the preserve of the very wealthy, with a large number of middle class families now being subject to taxes when assets are passed down. Although the IHT threshold is increasing, families are still going to be affected, particularly if the value of properties continues to rise.

Calculating IHT and other taxes can be a time consuming and complex process. Along with the general administration required when dealing with an estate, this adds yet another burden which the family is legally liable for.

At Kings Court Trust we take care of the whole estate administration process and can handle everything on your behalf, including all the IHT work. We also take full responsibility and liability so that you’re fully covered and our unique estate insurance protects you and your family against claims against the estate for ten years.”