THE YIELD taken from families paying inheritance tax has hit a six-year high, official figures show.
Families were charged £3.4bn in death duties last year, an increase from £3.1bn in the previous 12 months, the Office for National Statistics said. The total was only slightly below the £3.5bn anticipated by the Office for Budget Responsibility, the government’s financial forecaster.
HM Revenue & Customs received a similar windfall in its inheritance tax take in 2007/2008, when a record £3.8bn was paid.
Takings dropped substantially to £2.4bn in 2009/2010, when the government allowed people to pass their allowance to their spouse on death, but have risen for four consecutive years since. The threshold at which the 40% IHT charge is triggered has been frozen at £325,000 per person since 2009.
Collections are up because of rising property prices and static allowances, the ONS 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,” it said in a statement.
“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.”
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile
I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward