Investment - Articles - Inheritance tax hits new record for first half of the year

 Inheritance tax surpassed £6 billion in 2021/22 for the first time ever with the current tax year now set to post consecutive all-time high tax-takes.

 Stephen Lowe, group communications director at retirement specialist Just Group, commented: “It is no surprise that Inheritance Tax continues to rake in ever-increasing receipts for the Treasury. Frozen thresholds and soaring property prices that added £1 billion of housing wealth every day to the estates of over-55 homeowners since the start of the pandemic have combined to tip more estates into paying Inheritance Tax.

 “The Nil Rate Bands – the size of the estate that can be left without paying any inheritance tax – are due to remain frozen until 2026 and with government scrabbling to fill a fiscal hole, the likelihood of any increase in IHT thresholds before then seems vanishingly small.

 “It is another reminder of the importance that people regularly assess the full value of their estate so they get a clear picture of whether Inheritance Tax will affect them and understand what steps they can take to mitigate it. For some people, options such as lifetime mortgages could be an opportunity to unlock a portion of their wealth tied up in bricks and mortar. Passing on this wealth through ‘living inheritances’ allows people to see the benefit for recipients particularly if it helps loved ones through the current cost-of-living crisis, and it can minimise the Inheritance Tax payable on their estates.

 “We are seeing these ‘living inheritances’ become increasingly popular and according to the latest Just Group Care Report – the tenth in a decade-long series –over a third (35%) of parents aged 45+ with adult children had gifted at least £5,000.

 “Professional, regulated advice can provide invaluable help for people in working out how to manage their finances in later life, including how the value tied up in their property may impact their estate planning.”