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.

Contact us if you need advice about inheritance tax