Stephen Lowe, group communications director at retirement specialist Just Group, commented: “For a third successive year, Inheritance Tax has raised a record sum for the Treasury as frozen thresholds combine with house price rises to drag more estates into paying the tax.
“The prospect of a General Election looms large with one expected to be held in the second half of the year and it is likely that tax cuts and the economy will feature prominently in the coming months. We are already seeing public discussion about whether certain tax reliefs should be scrapped to make the ways wealth can be passed down between generations fairer, and we expect this to continue as we get closer to the election.
“Even without any changes to IHT, the OBR predicts the tax will continue to raise even more for the Chancellor of the Exchequer, and we encourage people to check if they may get caught by the tax. A good way to start is to assess the entire value of their estate, including an up-to-date valuation of their property.
“Professional, regulated advice can help people work out the total value of their estate, calculate how much tax they may be likely to owe and understand what options they have to manage their potential tax liability.”
Nicholas Hyett, Investment Manager at Wealth Club said: “It may only be paid by a small minority of taxpayers, but for those picking up the death tax tab, the bills are eye watering. And it’s not just the wealthiest families that are being dragged over the threshold for inheritance tax. Increasing house prices, coupled with threshold freezes, mean more families are getting caught out by this most hated of taxes despite their quality of living remaining unchanged.
In the last six months the government has faced increasing calls to abolish the tax altogether, or at least to introduce radical reforms. Evidence from countries such as Sweden and Australia suggests reform could have positives aside from endearing politicians to voters. Abolishing inheritance tax has been linked with a decline in the number of businesses relocating overseas, and an increase in the number of wealthy individuals choosing to move to the country.
In the meantime, the good news is that there are still lots of legitimate ways for individuals in the UK to pass on money free of inheritance tax.”
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