More Customer News

inheritance tax image

Inheritance tax receipts rocket to record levels

Her Majesty’s Revenue & Customs (HMRC) has released details of how much inheritance tax (IHT) they have taken from the estates of deceased UK individuals and the total last year soared by 22%, to an all-time record level of £4.6 billion.


Since 2009-10, the amount taken in IHT has increased on average by 12% each year and is now at the highest level since IHT was introduced in 1986.

 

A lot of this increase is due to house prices (8.4% last year, according to the Halifax House Price Index), but also to the fact that the amount someone can leave without IHT being payable has been unchanged since 2009 – and will continue to be frozen until 2021.

 

Facts about IHT

  • It is payable when someone dies and they leave their assets (their ‘estate’) to someone other than their spouse or registered civil partner.
  • The first £325,000 of their estate is taxed at 0%.
  • If they had a spouse or registered civil partner die before them, their £325,000 might also be carried forward so the first £650,000 of the estate would be taxed at 0%.
  • Above those thresholds, everything is taxed at 40%.

For example, a widow leaving £1 million will have £140,000 taken from her estate to pay IHT (based on a £650,000 threshold).

 

From April 2017, the 0% IHT band could be increased if you have a residential property.

 

The rules about IHT and how to avoid it are complicated; please ask a professional adviser for guidance on estate planning.

 

Inheritance Tax receipts

Categories

All News

Search Our News Archive

Archive

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.