In late July 2021, HM Revenue & Customs (HMRC) published its annual statistics on Inheritance Tax (IHT).
These revealed that IHT payments received by HMRC in the 2020-21 tax year totalled £5.4bn, up about £0.2bn (almost 4%) on 2019–20, when receipts were slightly lower than 2018–19. Typically, more than 20,000 deaths per year result in an IHT charge.
The stats show that recent years have seen some reductions in the number of estates affected, which HMRC believes is due to the phased introduction of the residence nil-rate band, which can allow married couples and civil partners up to £1m free of IHT.
A transferable nil-rate band assists this outcome by enabling the transfer of unused IHT allowance upon death to a surviving spouse.
There are steps that can be taken to keep an estate out of range of IHT, or at least reduce any IHT due upon death; these include simple lifetime gifts through to more complex trust arrangements.
Estate planning is a specialist area and, with the added possibility of a revised IHT regime soon, professional input is advisable.
Talk to Us
Inheritance Tax Planning (IHT) is a complex area that requires consideration and careful planning – often over a number of years. As IFA’s based in Eastbourne, East Sussex, we support clients with inheritance tax planning and advice across the Hastings, Uckfield, Seaford, Crowborough, Newhaven, Lewes, Bexhill, Tunbridge Wells, Brighton and Hove areas. Please get in touch to learn more. Paul Clifford is an experienced and independent financial advisor (IFA) based in Eastbourne, East Sussex, but visiting clients across East Sussex and Kent.
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It is important to take professional advice before making any decision relating to your personal finances. Information within this blog is based on our current understanding of taxation and can be subject to change in future.
It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.
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