- Blandy & Blandy Advises on Making the Most of Inheritance Tax Exemptions and Reliefs
Partner Jonathan Gater, in our Probate, Tax & Trusts team, highlights HMRC's recently released figures relating to inheritance tax and how individuals and families need to pay closer attention to the available exemptions and reliefs.
HM Revenue & Customs (HMRC) have recently released figures showing that they collected £5.3 billion of inheritance tax (IHT) last year (up from £4.7 billion in 2016/17).
Whilst property prices and the value of other assets continue to rise, the nil rate band (the value above which inheritance tax becomes payable) has remained unchanged at £325,000 since 2009. As a result, more estates are becoming subject to inheritance tax.
Further, a recent Freedom of Information Request by NFU Mutual found that only 4,000 of the 24,000 estates that paid IHT last year benefited from the new family home allowance, introduced last April. This provides an additional tax-free allowance for each individual (now £125,000) who leaves their main property to direct descendants, such as children.
According to HMRC the relief is automatically applied if families provide a will showing that an estate has been left to direct descendants.
There are a number of simple steps that can be taken to make sure maximum use is made of the available exemptions and reliefs. We encourange clients to have a carefully considered and up to date will and to seek our help on such matters.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.