Stephen Lowe, Director at retirement specialist Just Group, said: “Rising asset prices, frozen thresholds and constrained public finances continue to tighten the Inheritance Tax net and secure increasing receipts for the Treasury. This year looks set to be no different, current figures show the 2025/26 year is on course to be another record breaker – for the fifth year in a row. As the Chancellor continues to feel the fiscal pressure, she will want to explore all her options ahead of the Autum Budget. It’s likely that Inheritance Tax will have the slide rule run over it once more. With more estates being subject to inheritance tax, and the prospect of changes to the rules on the horizon, it is important people keep track of the valuation of their estate, including a recent assessment of their property wealth. Estate planning is complex and difficult, so many families may find it beneficial to seek professional financial advice to understand their circumstances, the impact of the IHT regime and their options for minimising tax liabilities.”
Helen Morrissey, head of retirement analysis, Hargreaves Lansdown: “Inheritance tax receipts continue their unrelenting rise, hitting £3.1bn for the year so far. We are only part of the way through the year, but it already looks likely we are in for another record year for this most unpopular of taxes. The decision to include pensions for inheritance tax purposes has garnered a lot of attention and has put the tax firmly on people’s radar. This means that those who think they may be affected can start putting a strategy in place to try and mitigate it. There are various gifting allowances such as the £3,000 annual allowance as well as gifting out of surplus income that will prove useful. However, it is hugely important that someone does not gift away too much too early to loved ones and potentially leave themselves short in their haste to avoid this tax. It's also worth saying that inheritance tax is not something that many families will need to worry about. There’s a set of thresholds available – known as nil rate bands. These mean that assets of any value can pass between spouses inheritance tax free and that the surviving spouse or civil partner inherits any of the deceased’s remaining nil rate bands. This means that couples have the potential to pass on up to £1m to their children or grandchildren free of inheritance tax.
However, there will be families who are not so lucky and could be caught unawares. Rapid house price growth in recent years may mean there are families out there with a looming tax bill they know nothing about. The same can be said for cohabiting couples who may have been together for decades but still don’t have the same rights as a married couple or civil partner. It’s important these couples understand the potential implications for them so they can plan ahead.”
HMRC tax receipts and National Insurance contributions for the UK (monthly bulletin) - GOV.UK
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