Protecting My Estate

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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.

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6K 4K 3K 2K 1K 5K 0 2010 2012 2011 2013 2014 2015 2016 2017 Year of Death Total receipts, Amount: £ million
6K 4K 3K 2K 1K 5K 0 2010 2012 2011 2013 2014 2015 2016 2017 Year of Death Total receipts, Amount: £ million
Source: HMRC

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:

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Spend itgive it awayplan to reduce it
Spend itgive it awayplan to reduce it

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
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Inheritance Tax thresholds - from 18 March 1986 to 5 April 2017 £400K £200K £100K £300K 0 1986 1994 1990 1998 2002 2006 2010 2014 2017
£400K £200K £100K £300K 0 1986 1994 1990 1998 2002 2006 2010 2014 2017 Inheritance Tax thresholds - from 18 March 1986 to 5 April 2017
Source: HMRC

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