IHT gains hit all time high
The amount of inheritance tax paid in last year reached a record high according to HMRC.
Reaching £4.84 billion, tax payments increased by 4% as household wealth also grew, despite the inheritance tax threshold remaining unchanged.
Despite the high sum, the pace of growth has declined, especially given the large number of deaths which occurred over the winter – however, the trajectory remains positive.
The largest proportion of the estate will usually be made up of property wealth, although this is not the case for those at both extremes of the financial spectrum. The poorest families are more likely to have cash and not be owners of their home, whilst the value of investments made by the wealthiest will often surpass that of any property that they own.
During 2015-15, inheritance tax was paid by 23,300 estates, amounting to 3.9% of all deaths during the course of the year.
Prior to 2009, the inheritance tax threshold was amended each year to react accordingly to asset price rises and inflation. That system is set to apply once more from 2020.
Despite the date scheduled for the start of the new system, the date has been criticised as estates will continue to face a growing tax liability in the mean time.
Commenting on this was head of financial planning at Hargreaves Lansdown, Danny Cox. He stated: “There is a long time between now and 2020 for things to be changed. It is unreasonable for people to be taxed on indexed gains, it is just unfair,”