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New data published today by HMRC shows that IHT receipts for April to June 2023 were £2 billion, which is £0.2 billion higher than the same period a year earlier. HMRC also noted in its update that IHT receipts in June 2023 were the highest monthly total on record. Laura Hayward, tax partner at Evelyn Partners comments.
New data published today by HMRC shows that IHT receipts for April to June 2023 were £2 billion, which is £0.2 billion higher than the same period a year earlier. HMRC also noted in its update that IHT receipts in June 2023 were the highest monthly total on record. Laura Hayward, tax partner at Evelyn Partners comments:
“While reports circulate around Westminster that the Conservatives are considering scrapping IHT as part its manifesto pledge at the next general election, the stark current reality is that more families are being dragged into paying the tax as each month goes by. Inflationary growth of asset values coupled with frozen allowances* are helping ensure that, as things stand, IHT receipts continue to be a lucrative earner for the Treasury.
“Families should not be distracted by IHT being used as a political football and instead focus on their tax planning to ensure they don’t pay more tax than they need to. They can minimise the chances of being hit by a sizeable IHT bill under the current regime by taking the appropriate action now.
“There are a number of ways of reducing or eliminating IHT bills, such as making gifts to family members. Gifts you make are generally not subject to IHT unless you die within seven years. There is also an annual gift allowance of up to £3,000 per tax year, and this will not be subject to IHT even if you do die within seven years.
“Many will want to ensure that their gifts are used responsibly, which can be a particular concern when large amounts of money are passed down to younger members of the family. Trusts can be a powerful IHT planning tool to help combat these concerns. Choosing to make gifts in trust means that money can only be accessed at a certain time or for a particular reason. Life insurance can also be set up in a trust, so that the money can be accessed immediately to pay an IHT bill.”
*the nil rate band remains frozen at £325,000 until at least April 2028
Evelyn Partners was created in 2020 through the merger of Tilney and Smith & Williamson. With £63.0 billion of assets under management (as at 31 December 2024), we are one of the largest UK wealth managers ranked by client assets.
Through an extensive network of offices across 25 towns and cities in the UK, as well as the Republic of Ireland and the Channel Islands, we support private clients, family trusts and charities, as well as provide investment solutions to financial intermediaries. Our diverse client base includes entrepreneurs, C-suite senior managers and partners of professional firms.
Our expertise span both award-winning financial planning and investment management, enabling us to offer clients a truly holistic dual expert wealth management service. Through Bestinvest, we also provide an online investment platform and coaching service, for self-directed investors, consistent with our purpose of ‘placing the power of good advice into more hands’.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.
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