New forecasts from the Office for Budget Responsibility shows that inheritance tax receipts are set to soar, with the government anticipated to collect an extra £900 million more than expected by 2022.
In March, the OBR suggested £32.4 billon of inheritance tax would be paid between 2016 and 2022. That figure has now been raised, fueled by a higher forecast for both rising house prices and the number of people dying.
– Pension age deaths are expected to rise to 502,000 by 2022, up from 476,000
– Until recently IHT has been charged at 40 per cent on estates with a value over £325,000 (£650,000 for couples). In April this year, this was increased to £850,000 for couples wanting to pass their main family home onto their children or grandchildren
In 2016/17, inheritance tax raised £4.8 billion and is set to top £5 billion in 2017/18. Experts attribute the rise also to a more aggressive HMRC which is looking more closely at people’s estates and challenging claims for reliefs.
Due to complicated tax rules, many families could possibly be inheriting less than they are entitled to. However, through careful planning IHT can be mitigated. Our Beavis Morgan tax experts are available to guide you and advise on the available strategies.