Inheritance Tax receipts rise £400m – tips for minimising your IHT risk

Inheritance Tax receipts rose £400m from April 2023 to January 2024 totalling £6.3 billion as more people were dragged into paying the tax due to rising property and asset prices while the UK government keeps the nil-rate band at £325,000.

HMRC are set for another record year of IHT tax receipts with more and more estates being subject to the tax. It is no longer the most well-off individuals finding themselves subject to IHT.

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“Inheritance Tax is not something that solely affects the very wealthiest in the society. More and more people are finding that they have tax to pay and, without any changes, it’s likely that the number of people who are affected by the tax is only going to keep growing if the value of assets like property continues to rise,” said Jonathan Halberda, Specialist Financial Adviser at Wesleyan Financial Services.

“However, the reality is IHT is largely an optional tax. By seeking professional support and acting early, you can put plans in place to minimise your risk.”

Wesleyan has provided a selection of tips for individuals to consider in order to lower their IHT liability.

Wesleyan’s Tips for IHT:

  • Using the Inheritance Tax spouse exemption – you can leave your entire estate to your spouse or civil partner and, even if its value exceeds the nil-rate band of £325,000, there’ll be no Inheritance Tax to pay.
  • Making a will – whether leaving assets to a spouse or civil partner or distributing assets to take advantage of tax-free allowances, a valid will can help you reduce or mitigate Inheritance Tax.
  • Using trusts – assets in trusts are no longer in your name and therefore not considered when valuing your estate for Inheritance Tax.
  • Gift giving – gifting money or assets to loved ones before you die can avoid Inheritance Tax. But there are limits on how much you can give away and who to, so get advice first.
  • Gifts to charity – leaving gifts to registered UK charities in your will, whether it’s money, property or other assets, is exempt from Inheritance Tax.
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