Government scraps controversial probate fee plans
The government has ditched controversial plans to increase probate fees that were first unveiled by Theresa May’s administration in 2016….More
There has been a significant rise in the number of estates paying inheritance tax (IHT), with the amount collected by the government hitting a record £5.4bn in 2018-19.
That figure represents a 3 per cent uplift from the £5.2bn paid the previous year, with 72 per cent of the total collected coming from estates worth £1m or more. On average, the estates liable paid IHT to the value of £179,000.
HM Revenue & Customs (HMRC) also released figures to show that 28,100 estates paid inheritance tax in 2016-17, a 15 per cent rise on the number involved in 2015-16.
IHT bills have been on the rise since 2009, partly as a consequence of the government freezing the £325,000 threshold (termed the nil-rate band) above which estates are liable to tax at a rate of 40 per cent.
Speaking to the Financial Times, Tom Selby, senior analyst at AJ Bell, which provides online investment platforms, said: “With the nil-rate band frozen for a decade, it is no surprise that HMRC continues to rake in record sums through IHT. The world of inheritance tax is painfully difficult to navigate and while the wealthiest should be able to afford suitable advice to take advantage of the various exemptions and reliefs available, those who can’t, risk being caught out.”
Over the past nine years HMRC has more than doubled the amount it has raised through IHT, although the proportion of estates affected remains relatively low at 4.6 per cent
Rebecca Fisher, private client partner at law firm Russell-Cooke, said: “There continues to be a large degree of fear and anxiety around inheritance tax, but it is important to remember that, under the current system, less than 5 per cent of all deaths in the UK are actually liable.”
Rising property prices over the past decade have also contributed to the increase in IHT receipts, though, because figures on estates’ net assets and liabilities are only currently available up to 2016-17, these do not yet reflect the post-referendum property market, Ms Fisher added.