Inheritance Tax bill set to rise…

Enable’s IFA’s in Bishops Stortford have much experience in helping financial planning and Inheritance Tax is always a factor to consider. Recent Inheritance tax receipts for the 12 months to February 2016 published by the Office for National Statistics, show the inheritance tax bill is on track to be more than a fifth higher than last year.  The Government is expected to take £4.6bn in inheritance tax in 2015-16 compared to £3.8bn for the same period in 2014-15. Projections from Office for Budget Responsibility (OBR) also show that the number of family estates on which inheritance tax has to be paid has quadrupled since 2010, with the number up from around 10,000 to more than 40,000 this year.

At the moment estates worth up to £325,000 can be passed on without paying inheritance tax.  There is then a rate of 40pc tax payable over that threshold. This is due to change in April 2017 when the Government introduce an additional tax-free allowance which will ultimately allow homeowners to leave an extra £175,000 in property wealth. Making a property allowance of £500,000 for individuals or £1m for couples.  But the OBR data suggests that despite the new reforms, the number of families paying inheritance tax is still likely to soar in future years.

The Treasury may well want “hard-working families to be able to pass on their home to their children or grandchildren.” But more families will be pulled into the inheritance tax net than ever before and if you are paying inheritance tax now and just missing out on the higher allowances you might reasonably be feeling resentful it’s a tax that taxes something people have already paid income tax on.

Source: The Telegraph

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