Lately launched inheritance tax (IHT) figures for the previous yr spotlight the significance of lifetime tax planning, in keeping with Lewis Nelson, senior affiliate at Thames Valley regulation agency Blandy & Bland’s Wills, Probate, Tax and Trusts crew.
The reminder comes after HMRC introduced that they collected an extra £729 million over the earlier yr, the most important year-on-year enhance since 2017.
The entire collected by HMRC on inheritance tax for 21/22 was £6.1 billion, a rise of 14 p.c over the earlier yr. By 2026, the Workplace for Finances Accountability expects this to extend to £8.3 billion.
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A part of that is right down to the truth that the zero band fee (of £325,000) has remained unchanged since 2009, with the subsequent assessment not deliberate till 2026. On this time, the common property value has elevated by £140,129. This inflation signifies that an increasing number of property are falling outdoors the IHT tax-exempt band.
Blandy and Blandy recommend a number of totally different ways in which the inheritance tax invoice might be lowered, together with indicating that IHT is just not payable on property that goes to a widow, widower, or charitable belief.
One other instructed technique is to contemplate tax environment friendly investments that fall outdoors the purview of IHT in the event that they profit from enterprise aid. Lastly, planning forward utilizing the annual allowance of monetary items will help scale back the scale of the property.
Learn extra – Blandy & Blandy named as prime tier non-public wealth agency