City Investments of Chester

IHT receipts reach record high of £4.6bn

Inheritance tax receipts have reached record levels under the current system, as HM Revenue and Customs gathered £4.6bn during 2015/16.

Tax collected was nearly a quarter ( 22% ) higher than in the previous year. This is almost £1bn higher than the previous peak in tax year 2007/08.

IHT receipts had slumped after tax year 2007/08 due to policy changes and falling house prices. However in 2010/11 they started rising again in.

HMRC has stated that, without adjusting for inflation, this is the highest that IHT receipts have been since the current inheritance tax system was introduced in March 1986. It went on to explain that the increases are primarily a result of rising asset values.

Every year, residential property makes up approximately a third of the total value of taxpaying estates. The continuing rise in property prices has contributed to a rise in overall tax take.

In addition, as the average value of estates rises, an increasing number of estates will now be valued over the IHT threshold, which has been frozen at £325,000 since April 2009.

An increasing number of estates could, therefore, potentially be liable for IHT.

This has been seen in  HMRC’s figures which show more nearly 3.5 per cent of deaths were liable for IHT in 2015/16, compared with around 2.5 per cent in 2010/11

Source FT Adviser July 29, 2016

City Investments - Independent Financial Advisers in Chester