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Inheritance tax reaches £5.2 billion

Inheritance tax reaches £5.2 billion

Figures recently released show that HMRC received a record of £5.2 Billion Inheritance Tax in the last tax year.  This represents an 8% increase in comparison to the year before.  This increase comes despite the introduction of the Residence Nil-Rate Band Allowance in April 2017.

In addition, at this time, the favourable reliefs and exemptions from IHT, in particular those relating to Agricultural Property and Business Property remain.  These areas are under review following the Government’s announcement earlier this year that the Inheritance Tax system would be looked at to see whether it was fit for purpose.

A significant exemption from Inheritance Tax is the charity exemption.  Smee & Ford has recently released its Legacy Trends 2018 report, which estimates that legacy income for charities is now between £2.8 and £2.9 Billion.  Some of the key statistics shown in their report are:-

1.         6.1% of the population leave a bequest to charity in a Will

              2.         In 2017 122,144 Wills contained a charitable legacy

3.         Of those Wills containing charitable bequests 34.7% support only one charity.

4.         10% of the monies received from charities came via specific legacies, the other 90% coming from sharing in the residue of the estate.

It is anticipated that charities will continue to receive increasing amounts in the way of legacies and residuary distributions, particularly given the favourable exemption from Inheritance Tax.

If Inheritance Tax is a concern to you, or if you are interested in leaving something to charity in your Will, please do get in touch with Richard Horwood.

Please note the contents of this blog are given for information only and must not be relied upon. Legal advice should always be sought in relation to specific circumstances. 

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