The amount families are paying in inheritance tax (IHT) has hit its highest level in six years, according to new government figures.
Data released by the Office for National Statistics on 31 July showed that inheritance tax receipts totalled £3.4 billion in 2013-14, up by 8.6 per cent on the receipts figure for 2012-13.
The 2013-14 IHT total is the highest since the £3.8 billion collected in the 2007-08 financial year.
The report setting out the figures said: “Residential<!–> property makes up approximately a third of the total value of taxpaying estates and the ongoing rise in property prices has contributed to a rise in overall tax take.
“At the same time, as the average value of estates rises, an increasing number of estates will now be valued over the IHT threshold (or nil rate band), which has been frozen at £325,000 since April 2009.”
Inheritance tax is levied at 40 per cent on the value of estates above the £325,000 threshold and, as the new report acknowledges, the value of a home – or a future inheritance – could easily push someone with fairly modest assets into the IHT bracket.
Tim Steele, a partner in Palmers’ Wills, Trusts and Probate team, who has particular expertise in inheritance tax planning said: “There are a range of HM Revenue & Customs-compliant options to make sure no more inheritance tax is paid than necessary, including lifetime gifts, IHT-efficient investments or placing lump sums payable on death into trusts. For more information, please contact us.”