As shown by official figures, it is estimated that over the next five years an extra £900m is to be paid in inheritance tax.
These figures were shown by documents that were published alongside the autumn budget, which showed a higher amount for the expected inheritance tax liability to families over the next five years than was predicted in March.
There are many factors that may have led to this increase. One of these factors is likely to be the rate at which people are dying, which is higher than what was expected previously. This means more inheritance tax will be paid as a result.
Another cause of this increase is likely to be an increase in house prices as well as a growing focus on those using loopholes to avoid tax. This means that less people are avoiding tax and are therefore their loved ones are paying higher prices.
New rules extending the IHT-free allowance have, however, come into play, and mean that some couples may be able to pass on £1 million tax-free by 2020.
Many people choose to take advantage of gift allowances and other options to reduce the burden of inheritance tax on their family when they pass away, but there are complex rules at play that may make understanding the world of IHT difficult, for example when setting up a trust.
Trust law is a complicated one, and will require financial advice before setting one up in order to ensure all the steps are followed correctly. If you’re interested in finding out more about reducing inheritance tax, new tax rules and inheritance tax reliefs, talk to our financial advice team. Please call us on 01926 492406 or email us at firstname.lastname@example.org to make an appointment.