Many more 'Ordinary' families face paying Inheritance Tax - Are you prepared?
HMRC collected a record £4.56bn in Inheritance Tax (IHT) in 2015/16, a 21% increase in IHT payments from the previous year and an enormous 70% increase since 2010/11.
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.
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 have been introduced 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 2020/21.
These increases will gradually bring the threshold to £1,000,000 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.
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.
If you would like to find out more or review your Inheritance Tax Liability please contact us.