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Annual HMRC inheritance tax stats

  • 2016/17 a record year for inheritance tax (IHT) receipts at around £4.9 billion
  • So far 22% increase in IHT receipts in first 3 months of 2017/18 tax year compared to first 3 months of 2016/17
  • IHT very emotive for people but still less than 1% of total tax take

HMRC has released their annual IHT data, you can find it here.

  • Confirms IHT receipts for 2016/17 at £4.84 billion
  • Numbers of estates that pay IHT, their size and location, and the assets contained in those estates for 2014/15
  • Numbers of estates paying reduced rate of IHT due to charitable legacy for 2014/15

IHT receipts for 2015/16 were £4.658 billion, up 22% on the previous tax year and for 2016/17 there has been a further 4% rise.

Increases in property values, stock markets and cash savings balances together with the freezing of the IHT allowance since April 2009 have combined to push IHT receipts higher.

The detailed breakdown of IHT data is normally a couple of years behind. This data release provides granular 2014/15 data.

Danny Cox, Chartered Financial Planner, Hargreaves Lansdown;

“The Exchequer’s coffers continue to benefit from the booming housing market and rising asset values and despite the new tax break for the family home, IHT receipts are set to break records again this year.”

Other 2014/15 IHT facts

23,250 estate estates paid an average £164,000 IHT up from 19,917 estates in 2013/14. The increase in estates subject to IHT is due predominantly to a much larger number of deaths in the winter of 2014/15.

1,558 estates benefited from the reduced 36% IHT rate (normally 40%) as 10% of the taxable estate was left to registered charities, reducing IHT liabilities on these estates by £33 million. This is a relatively new exemption but the number of estates claiming was lower than the previous year, down from 9.3% of estates which pay IHT to 6.7% of estates which pay IHT.

Residence nil rate band from April 2017

IHT receipts so far in 2017/18 are unlikely to show the impact of the new residence nil rate band due to the time lag between estate administration and IHT collected (typically 6 months).

From deaths on or after 6 April 2017, a new main residence nil rate band is available in addition to the standard nil rate band of £325,000. This will provide couples with the potential for IHT free estates of up to £1 million in value. The main residence nil rate band will be lower than the net value of the home (e.g. after any outstanding mortgage or liabilities) to a maximum of;

  • £100,000 for 2017/18
  • £125,000 for 2018/19
  • £150,000 for 2019/20
  • £175,000 for 2020/21