HMRC is set to bring in record amounts of inheritance tax (IHT) and capital gains tax (CGT), according to official predictions.
In 2017, the Revenue took more than £5.3 billion from people’s estates, and projections from the Office for Budget Responsibility suggest that a further £1.2 billion will be collected in IHT by the end of this tax year.
HMRC is also on course to net £8.8bn in CGT between now and the end of March, when the majority of the tax is collected.
A spokesperson for the data publishers, Sean McCann, says: “It’s clear that the taxman is cracking down hard on IHT by looking more closely at people’s estates and challenging claims for reliefs. You’d expect that the introduction of the residence nil-rate band would see receipts flatten out or even fall a bit, but the opposite is happening.”
On 6 April 2017, the residence nil-rate band was introduced, adding an additional £100,000 to the £325,000 IHT-free threshold for those who leave a main residence to a family member.
“When IHT receipts rise, it’s usually because of a buoyant housing market. Yet property prices aren’t rocketing in the same way, so it’s difficult to see what could have caused such a sharp increase in receipts, other than a more aggressive approach. IHT is one of the more complex taxes and there are traps to fall foul of — as many families are finding out,” Mr McCann adds.
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