The UK government’s income from inheritance tax continued to grow in the period from April to December last year as higher property prices and increasing value of investments meant more people became liable for the tax.
IHT tax bills from £700m to £5.3bn from April to December last year.
The government has frozen the inheritance tax rate at £325,000 for two years which likely lead to more people becoming liable for the tax in the coming years.
Mitigating IHT
Fortunately, IHT is a tax that can be managed through the effect use of schemes designed by the government to spur private investor investment in growing businesses.
These include the EIS and SEIS scheme that are exempt from IHT, should investments be held for two years.
“Inheritance tax (IHT) receipts will continue to remain high given the freezing of IHT thresholds for two more years. One area that advisers and investors could consider helping mitigate against IHT is by investing in an Enterprise Investment Scheme (EIS), as full inheritance tax relief is provided, for the life of the investment once the shares have been held for two years,” said John Glencross, CEO and Co-Founder of Calculus.