£5.4 billion received by HMRC in IHT payments in 2020-21 tax year
Listed Under: News
In late July, 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