Inheritance tax receipts in the UK have reached £7 billion from April 2024 to January 2025, an increase of £700 million from the previous year. With the rising property prices and stagnant tax allowances, an estimated 10% of estates may pay this tax by 2030. Current allowances have been frozen for years, contributing to a rising tax burden. Changes to inheritance tax reliefs for AIM and private businesses make tax evasion more challenging, pushing for lifetime gifts as a strategic tax planning method, especially from grandparents aiding education funding.
"Inheritance tax continues to be a meal ticket for HMRC. It may only affect a small percentage of estates, but that number is growing."
"The main inheritance tax allowance has now been frozen at £325,000 for 15 years, and remains frozen for another 5 years until 2030, while the £175,000 residence nil rate band hasn't changed since 2020."
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