Inheritance tax ‘no longer just for rich’ as more families face six-figure death duty

Inheritance tax is ‘no longer just for the rich’ experts have warned as increasing numbers of Britons face six figure bills.

The Treasury brought in £2.4billion in inheritance tax receipts in the three months to July, £300 million higher than the same period last year.

The standard Inheritance tax rate is 40 percent and is only charged on the part of your estate that’s above the tax-free threshold of £325,000.

The value of an estate includes the property, money and possessions of someone who has died.

Have you been impacted by this story? If so email holly.bancroft@independent.co.uk

If the value of your estate is below £325,000 then there’s normally no Inheritance tax to pay. You can also by-pass the tax if you leave everything above the £325,000 threshold to your spouse, civil partner, a charity or a community amateur sports club.

The threshold has stayed the same since April 2011 but property prices have soared, meaning increasing numbers of people are paying more tax when they die, The Express reported.

The average cost of a property has risen by £140,129 from April 2019 to June 2022.

This means that its not just millionaires having to stump up money in inheritance tax but also many middle-class families who have seen the value of their property rise, experts told the paper.

Rising house prices are pushing people over the inheritance tax threshold

(PA)

Myron Jobson, senior personal finance analyst at Interactive Investor, told The Express: “The bumper tax haul demonstrates that inflation – both wages and house prices – is feeding through into the HMRC coffers.

“This may leave a sour taste at a time people can’t afford energy bills.”

Shaun Moore, at wealth management firm Quilter, said: “No longer is IHT the preserve of the rich.

“Many estates are having to pay the tax simply because of their property wealth. Inheritance tax is proving to be more and more lucrative for the Treasury.”



Source link

Leave a Reply

Your email address will not be published.