Record monthly amount of Inheritance Tax paid in March

The latest data from HM Revenue & Customs (HMRC) has revealed that a monthly record of £483m was paid in Inheritance Tax (IHT) in March 2017.

The news follows worrying predictions from the Office for Budget Responsibility (OBR), which recently altered its forecasts to state that the amount of IHT paid by Britons will balloon by almost a third over the course of the next five years.

It estimated that IHT will net the Treasury more than £6bn in the 2021/22 financial year – up from the £4.8bn total paid during the course of 2016/17.

In the UK, IHT is currently levied on any property and financial gifts passed down to beneficiaries at the point of death at a rate of 40 per cent. Each individual is entitled to pass on up to £325,000 worth of assets tax-free before they incur this charge. This threshold or ‘nil rate band’ doubles to £650,000 for married couples and civil partners.

At the beginning of April, however, new legislation was introduced which enables families to pass on a further £100,000 of their main residence’s value to certain ‘qualifying beneficiaries’ such as their children, grandchildren or foster children. This is known as the new residence relief nil rate band (RNRB).

On top of this, there are also a number of options available to reduce the amount beneficiaries might have to pay in IHT – such as charitable donations and gift-giving to a spouse or partner.

However, the law surrounding Inheritance Tax is complex and confusing and expert advice should always be sought in order to determine which option is best for you, and to make the relevant provisions in your Will accordingly.

Carter Lemon Camerons LLP Solicitors is a City law firm which provides Wills and probate services with a personal touch to its clients. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. If you require advice on Wills and probate, or Inheritance Tax planning, please contact Ian West or Michael Woodward or telephone: 020 7406 1000.