Inheritance tax receipts have already increased by £300million in 2022, as more Britons are caught in the net. Experts say this rise has been driven by booming property prices but there are ways Britons can pay less to HMRC.
More Britons than ever before are being forced to pay inheritance tax because thresholds haven’t risen in 10 years, but property prices continue to increase.
Receipts for the first quarter of the 2022 financial year hit £1.8billion – £0.3billion more than the same quarter last year.
Stephen Lowe, group communications director at retirement specialist Just Group, said frozen tax thresholds and the booming property market were to blame and it’s only going to get worse.
He said: “The Office for Budget Responsibility (OBR) forecasts that as many as 6.5 percent of estates could be liable for inheritance tax by 2026 – nearly double the 3.7 percent that the figures show for the latest financial year.”
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It’s not just people in London and the South East who are being caught in the net because of rising property prices.
Mr Lowe explained: “The value of homes in the South West, for example, are up by 17 percent year-on-year and those in the East of England and East Midlands are up by 15 percent, adding many tens of thousands to the value of homeowners’ estates.
“It makes good sense for people to keep track of the likely size of their estate and the tax rules that will apply to it.”
However, there are 10 things grandparents can do to ensure their loved ones avoid an inheritance tax bill or pay less.
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However, it’s not a good idea to put your house in your children’s name in an attempt to avoid paying inheritance tax or care home fees.
A will writer recently told Express.co.uk why he believes Britons should not give their house to children before they die.
Graham Southorn from Maplebrook Will Writing Bristol warned it is a common misconception that people can avoid paying inheritance tax (IHT) and care fees by going down this route.
Instead of making life easier, it could really complicate matters, he said, the best advice is to talk to a professional.