Inheritance Tax receipts are expected to double by 2030
Research conducted by Canada Life has shown that inheritance tax receipts are expected to reach £10bn per year by 2030, almost doubling the current amount paid.
In 2018 –19 inheritance tax receipts reached an all-time high of £5.4billion, £200 million up from the previous year and £600 million more from the year ending April 2017. And, to put it further into perspective, inheritance tax receipts accounted for £537m in March 2019, showing an increase of 44 percent from the £372m paid in February 2019
With the research being based on an assumed continuation of the current regulatory environment and current revenue trends, a large proportion of the increase is a result of the nil rate band being frozen at £325,000 for the past ten years. Frequently used as a way of protecting an estate from inheritance tax, as asset values have increased the nil rate band has not and taxpayers being unable to protect their estate from inheritance tax are being caught out.
With the government taking advantage of the increase in property prices, many home owning families now exceed the nil rate band and children and grandchildren are having to pay tax, that with proper planning would not have had to been paid.
The research also showed that around 18% of estates valued at over £1 million do not have inheritance tax planning in place, and therefore their benefactors are paying 40 percent tax on all assets over £325,000.
Inheritance tax is only payable on less than 5 percent of UK deaths, but an inheritance tax return must be submitted even when there is no tax to pay.