Investment - Articles - IHT impacting higher proportion of families

Total Inheritance Tax liabilities were £7.03 billion for 2023/24 compared with £6.70bn in 2022/23. The latest figures come as the Office for Budget Responsibility forecasts that the number of estates paying Inheritance Tax will rise to nearly 10% of deaths by 2029/30 as frozen thresholds and recent policy changes bring more families within the scope of the tax and raise a projected £13.7bn by 2029/30.

Simon Martin, Head of UK Technical Services at Utmost, a leading global provider of insurance-based wealth solutions, commented: “The inexorable rise in the proportion of estates facing Inheritance Tax shows how a tax once associated primarily with only the very wealthy is now affecting a growing proportion of families as frozen thresholds continue to bite.

“This direction of travel looks set to accelerate as recent reforms to the Inheritance Tax regime begin to take effect. Measures such as the inclusion of pension benefits in estate calculations from April 2027, for example, will further increase the number of families facing a potential liability.

“Families should not wait until these changes take effect, as the range of options available to manage a potential liability may narrow over time. It underlines the importance of professional financial advice in helping families understand their individual situation and pass on their wealth to loved ones as efficiently as possible."