Protecting My Estate

Increases in Inheritance Tax Receipts

The amount paid in inheritance tax (IHT) has continued to climb, reaching £5.2bn in 2017/18, despite the recent introduction of a nil-rate band for family homes.

Latest figures from HM Revenue & Customs (July 2018) showed the amount paid in IHT increased 8% of the previous year, making this the eighth consecutive year where receipts have gone up.

The average tax paying male-owned estate has a tax liability of £182,000, with female’s estates having to pay on average £176,000.

Reducing the Impact of Inheritance Tax

Inheritance tax is often referred to as a “voluntary tax” although in real life, this is not necessarily the case.

Inheritance tax is charged at 40% on the taxable estate. It is very difficult to avoid it totally, however there are several ways of reducing the impact of the tax. We summarise these as:

Inheritance Tax Thresholds

In addition to the current income tax thresholds, you may be able to claim the main residence nil-rate band. This measure introduces an additional nil-rate band when a residence is passed on death to a direct descendant.

• £100,000 in 2017 to 2018
• £125,000 in 2018 to 2019
• £150,000 in 2019 to 2020
• £175,000 in 2020 to 2021