IHT receipts on the rise
HMRC reported collecting £5.7bn in IHT this year between April and November, which is a £500m increase from the same period last year. It’s thought this is due to frozen thresholds pushed more estates into paying the tax. With NI, Capital Gains and IHT all going up, HMRC reported a £15bn increase in the treasury’s coffers from the same point a year ago.
“The continued rise in inheritance tax receipts reflects how frozen thresholds and increasing property and asset values are pulling more families into the IHT net,” said Richard Bate, head of private wealth at Weightmans. Decades of rising property prices have been a major factor in why more and more people end up paying IHT.
More estates paying IHT
Currently 1 in 20 estates a liable for the tax, however the government has estimated that this will rise to 1 in 10 by 2030. Hopefully the new year will also see clarity on the exemption that pensions can be passed on without paying IHT. Read more about the consultation process currently happening here.
It’s more important now more than ever to plan for your future, Some key factors to note in planning for your future and your legacy.
- Obtain an up-to-date valuation of your estate
- Ensure you have an up-to-date Will
- Think about investment planning tools such as trusts, lifetime gifting and family investment companies
Net government borrowing
This is all in light of the figures for net government borrowing being the lowest monthly figure in three years at £11.2bn. Alison Ring, ICAEW director of Public Sector and Taxation, said: “Today’s numbers indicate that while net debt of £2,818bn is much higher than the Chancellor would like, she will be pleased that the public finances remain on track with the path set out in her autumn budget.
“What will worry government is that recent economic indicators such as weak GDP growth and rising inflation are flashing amber, and what this could mean for tax receipts and the cost of servicing government debt in 2025. Money remains extremely tight and that is unlikely to change any time soon.”
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