The government introduced the additional ‘main residence’ allowance for Inheritance Tax (‘IHT’) with much fanfare in April 2017, but nearly two years later it does not appear to have resulted in the tax savings promised by the headlines.
Record income from Inheritance Tax revenue set to increase
As we approach the end of the tax year HM Revenue & Customs are expecting to exceed last year’s record IHT take of £5.2bn, and by 2023 the government expects to be receiving £7bn per year from IHT.
Rising property prices, among other factors, are still ensuring that even those who might not expect it are at risk of paying substantial amounts of tax on their death.
Failing to consider IHT implications can mean that a sizable portion of the estate you wish to pass on is lost to charges which could have been avoided with careful planning.
Planning for the future
With the individual IHT allowance currently frozen at £325,000, and the additional main residence allowance only available in limited circumstances, it is more important than ever to take professional advice.
With expert inheritance tax advice, it is possible to plan for the future, making sure that Wills are tax efficient and that any lifetime tax planning is carried out in good time.