Decades of rising property prices and stock markets mean that increasing numbers of estates are falling into the web of inheritance tax, despite the fact that inheritance tax is effectively a voluntary tax that can be mitigated with some careful forward planning. Death may be one of the few certainties in life, but many people do not like to think about it, let alone plan the financial consequences of it many years ahead.
A quarter of all estates that are paying inheritance tax are being investigated by HM Revenue and Customs (HMRC).
Over 5,000 inheritance tax (IHT) investigations are opened by HMRC each year, according to a Freedom of Information (FOI) request from wealth management firm Quilter.
There were around 22,000 estates liable for IHT in the 2018/19 tax year according to HMRC figures. This means around 25% of estates were investigated.
Passing wealth down the generations while you are still around to see the impact it has can be very satisfying – and incredibly tax-efficient. But before parting with your cash, it’s sensible to weigh up the pros, cons and practicalities.
As Benjamin Franklin famously said, “in this world nothing can be said to be certain except death and taxes”, and the two are intrinsically linked when it comes to inherited wealth. Both are unpalatable topics for conversation.
Finding love in later life is becoming increasingly common in the UK, with the number of over-65s tying the knot up by nearly 50% over the last decade. But while it can bring happiness and security, a new partner at this stage can also bring its fair share of financial planning headaches.
A record £5.2 billion in inheritance tax receipts was collected in the 2017/18 tax year, figures from the Inland Revenue reveal. This is some 8 per cent up on the previous year.
New statistics published by HMRC today show that the inheritance tax (IHT) gap has grown to £600 million in 2016/17, rising 50 per cent from £400 million five years ago in 2012/13. This gap is likely to be a reflection of the growth in the amount of IHT owed.
The tax gap (for IHT but also other taxes) measures the difference between the amount of tax the Treasury thinks it should be getting and what was actually paid.
Sam Barrett looks at solutions to sidestep a potential inheritance tax liability without giving away assets you may still need.
Inheritance tax receipts are rising at an ‘alarming rate’, with death duties no longer reserved for the ultra-wealthy.
New research has found a lack of understanding regarding inheritance tax rules in relation to Isas, so here’s what you need to know.