HMRC net £5bn through inheritance tax

0
185
tax

New data reveals that inheritance tax paid by British families totalled over £5bn for the first time ever.

Experts say that more and more middle-class families are being forced into paying the tax due to rising house prices in the South and the elderly being discouraged from downsizing as a result of increases in stamp duty.

In the year to May, £5.1bn was paid to HMRC as inheritance tax, a rise of around 9 per cent when compared to the £4.7bn collected the previous year.

The threshold for inheritance tax had stayed the same since 2010, despite the sharp rise in house prices, and as such more properties are affected by the tax each year.

Figures provided by the Office for Budget Responsibility (OBR) show that there has been a drastic rise in the number of estates requiring inheritance tax payments, which 40,000 qualifying for the tax compared to 10,000 in 2010.

David Hollingworth, a property expert at mortgage firm London & Country, said: “If elderly people don’t downsize they may pay more inheritance tax as more of their money will be tied up in their property, leaving them with less to give away.

There are various reasons why people are not downsizing, a big one is the huge cost of moving, including stamp duty and also the lack of suitable housing for retired people.”

The law on inheritance tax changed in April 2017, with the Government increasing the tax-free allowance, meaning that an estate worth £500,000 would no longer be taxable, with this figure rising to £1m for couples.

Tim Fullerlove, a partner at law firm Wilsons, added: “A substantial amount of wealth is now being taken by the government through inheritance tax.

NO COMMENTS