Don’t be an Inheritance Tax loser
- 9th July 2021
Inheritance tax (IHT) receipts rose by 54% in April and May 2021 in comparison to the same two-month period in 2020, according to the latest monthly National Statistics report released by HMRC on the 22nd June 2021.
Receipts for April 2021 to May 2021 totalled £966 million. This is an increase of £340 million on the same period last year.
The data also highlighted full-year IHT receipts of £5,326 million for 2020-2021, a £204 million increase from the year before. In addition, total HMRC receipts for April 2021 to May 2021 were revealed to be £106.8 billion, over £45 billion higher than the same period in 2020.
What has caused an increase in inheritance tax receipts?
HMRC indicated that the significant increase in year-on-year IHT receipts is “expected to be due to higher volumes of wealth transfers that took place during the COVID-19 pandemic”.
In the 2021 Spring budget, Chancellor of the Exchequer Rishi Sunak extended the freeze on the IHT nil rate band and froze both IHT and capital gains tax (CGT) until 2026. This means that the nil-rate band (NRB) remained at £325,000 as did the residence nil-rate band (RNRB) at £175,000.
This has been referred to as a ‘stealth tax’ by many observers that will cause IHT bills to continue to rise as the value of property and overall wealth increases.
In addition, there is growing concern that both IHT and CGT could yet be increased as the Government explores different avenues to recover from debt incurred by the pandemic.
There are a number of ways in which we help clients to mitigate their IHT liabilities. If you would like to find out more about how to mitigate your IHT liabilities then please do get in touch. We offer a free initial consultation so please do call us on 0333 11 222 11 (local rate number).
The information and opinions expressed herein are the views of Forrester Boyd Wealth Management and are based on current public information we believe to be reliable but we do not represent that they are accurate or complete and should not be relied upon as such. Any information herein is given in good faith, but is subject to change without notice. No liability is accepted whatsoever by Forrester Boyd Wealth Management, employees and associated companies for any direct or consequential loss arising from this document.
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Information contained within this article is not a personal recommendation of Forrester Boyd Wealth Management. The wording in this article is not to be construed as an offer or advice. We recommend you seek advice concerning suitability from your investment adviser.