HMRC collects record £5.1bn in inheritance tax
A record £5.1bn has been collected by HMRC through inheritance tax receipts this year, a 9% increase on 2016, reflecting growing property values and frozen threshold rates
The £5bn barrier was cleared in IHT receipts for the year to May 2017, a 9% rise in the previous period. The Office for National Statistics revealed that a £5.1bn haul was made, compared to £4.7bn a year earlier.
From April a nil-rate band was introduced for family homes, which will increase over the following four years. The ‘family home allowance’ will allow a further £100,000 to be passed on tax-free, if their residential property is passed onto a direct descendant.
This new nil-rate band will increase up to £175,000 for the tax year 2020/21.
If the deceased had down-sized to a less valuable residence, or had ceased to own a residence on or after 8 July 2015, that part will still be available provided they leave the smaller residence to their direct family. Buy-to-let properties do not qualify for the relief.
Foreign domiciles saw the IHT rules change in April, catching their UK property assets within offshore vehicles into the IHT regime.
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