Inheritance tax (IHT) receipts were generally higher in the 2018/19 tax year and saw a 44.4% increase in March from the previous month, according to the latest data from HM Revenue & Customs (HMRC).
Overall, IHT receipts ended 2018/19 3.1% up on the previous tax year, increasing by around £160m to £5.4bn.
The taxman’s data also highlighted that IHT receipts were at their highest level both in terms of annual revenue and as a proportion of GDP.
Canada Life wealth management and tax specialist Neil Jones argued a lot of the payments were preventable, explaining: “Death and taxes may be the only two certainties in life but, with careful planning around the former, some of the latter is unnecessary.
“Starting any planning early is essential and there are a range of trusts available that can enable clients to make sure more of their money goes to beneficiaries while reducing the amount of tax payable when they die.”
‘Remove IHT sting’
Quilter tax and financial planning expert Rachael Griffin suggested IHT may take a dip next month due to the government increasing the residence nil-rate band (RNRB) to £150,000.
This will give people an additional threshold before IHT becomes due on their estate, which is set to remove some of the tax’s sting, she said.
“The RNRB depends on a number of factors, including your marital status and who inherits the family home,” Griffin explained. “These kinds of rules should be rethought so people have the freedom to gift to whomever they want and are not constrained by antiquated societal rules.
“A simple IHT regime gives people far greater opportunity to best plan their estates and make the most difference to future generations.”