HMRC's monthly report indicates inheritance tax receipts hit £6.3 billion in nine months (April-Dec 2024), a £600 million increase year-on-year, hinting at ongoing growth. As only 4% of estates currently face this tax, projections show this could double by 2030. Critics cite frustrations over double taxation—where individuals pay taxes both upon earning and upon passing wealth—leading to significant overall tax burdens. In light of this, strategies such as making surplus income gifts can help mitigate inheritance tax liabilities. Recent budget changes maintain the IHT threshold freeze for an additional two years.
Inheritance tax continues to be something of a golden goose for HMRC - with a tax take that seems to rise inexorably. It may only affect a small number of estates at present, but that number is growing.
What really gets to many people about inheritance tax is the double taxation. You're taxed on the money when you earn it and again when you die, resulting in combined income tax and inheritance tax rates that can be as high as 67%.
One way to avoid the taxman having your cake and eating it too, is to make gifts out of surplus income. By making regular gifts out of leftover income, you can pass money on to your loved ones free of inheritance tax.
Changes to Inheritance tax announced at the Autumn Budget included an extension to the freeze on IHT thresholds, which have been frozen for a further two years (until 2030).
Collection
[
|
...
]