finance

Inheritance tax shock as more now paying death duty


The taxman raked in a record £7.1billion from deaths last year. Receipts from inheritance tax rose by £1bn, official figures reveal.

Years of house price rises, especially in the South East, soaring inflation, and tax freezes have pushed many estates over the IHT threshold.

Now experts are warning more are set to become 40 percent taxpayers for the first time on their death.

Andrew Tully, of insurers Canada Life, said: “Inheritance tax is no longer only on the wealthiest.

“As these record figures show, IHT has become a mainstream tax on ordinary people, largely due to house price increases.

With forecasts that IHT will grow to £8.4bn by 2027/28, people need to put their finances in order to avoid the tax man taking more than his fair share.”

IHT is levied at 40 percent on the value of an estate above £325,000.

This includes savings, investments and possessions. Since 1999, £87.5bn has been paid by those passing on assets to loved ones.

The amount before IHT is due has been £325,000 since April 2009.

An extra £175,000 nil-rate band began in 2017 for those passing a primary home to children or grandchildren.

Surviving spouses can inherit their partner’s allowance, so a couple can generally pass on £1m free of IHT.

Last year Chancellor Jeremy Hunt extended the freezing of payment thresholds to 2027/28.





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