HM Revenue and Customs (HMRC) collected more than £3 billion in inheritance tax in 2012-13 – the biggest sum since the beginning of the financial downturn.
According to figures from the Office of National Statistics, families paid £3.1bn in inheritance tax in the last year, up from £2.9bn in 2011-12. However, this is still not as high as the £3.8bn collected in 2007-08.
The increase is being attributed to rising share and property prices, as well as HMRC’s heightened focus on the collection of inheritance tax. House prices peaked in 2007-08 – the last time the inheritance tax take was so high – just before the onset of the credit crisis and the collapse of Northern Rock.
The recovery of the housing market, alongside the freezing of the tax-free threshold until at least 2019, means that more families are likely to be caught out by inheritance tax.
The threshold currently stands at £325,000 per person, which means that married couples can bequeath up to £650,000 tax-free. Tax is levied at 40 per cent on anything above this threshold.
This makes it all the more important to seek professional advice at the earliest opportunity in order to mitigate any inheritance tax liabilities. For example, gifts made seven or more years before your death are exempt.
The team at JW Hinks can advise on all aspects of inheritance tax minimisation, ensuring the right provision is made for your family and your business. To find out how we can help you, please contact us.