"As things stand inheritance tax may only affect around 1 in 20 estates, but that number is on the increase as an ever greater number of estates become liable for the most hated of taxes. Years of freezes in thresholds, matched with increasing house prices and rising inflation have pushed more families, who might not consider themselves to be wealthy and would not historically have qualified for the tax, over the threshold."
"The current inheritance tax allowance has been frozen at £325,000 for 16 years, and remains frozen until 2030. The £175,000 residence nil rate band hasn't changed since 2020. These freezes are a stealth tax, which allows the government to increase their take without a backlash from a headline grabbing tax hike, but still contribute to the highest tax burden in 70 years."
Inheritance tax receipts totalled £3.7 billion in the first five months of the 2025/26 tax year, £0.2 billion higher than the previous year, continuing a two-decade upward trend. A growing number of estates are becoming liable due to long-standing freezes in the inheritance tax allowance and the residence nil rate band combined with rising house prices and inflation. The main allowance has been frozen at £325,000 for 16 years and remains frozen until 2030, while the £175,000 residence nil rate band has not changed since 2020. Lifetime gifts, especially regular gifts from leftover income, are increasingly used to reduce exposure and avoid double taxation.
Read at London Business News | Londonlovesbusiness.com
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