At 40% on the value of estates over £325,000 the amount of Inheritance Tax (IHT) paid on some estates can come as a nasty shock.  However more and more estates are liable to IHT.

Rising house prices and bull market in shares have pushed many people’s wealth above £325,000.

According to HM Revenue & Customs IHT receipts rose by 7.9% to £3.1 billion in 2012-3 and by 8.6% to £3.4 billion in 2013-4.  Is it any surprise that the chancellor, George Osborne has frozen the IHT thresholds until at least 2018?

The number of families paying IHT is expected to increase by 66% over 2 years to 43,811 in 2015-6.

Married couples and civil partners can leave everything to their spouse free of IHT.  By doing this their IHT nil rate band is passed to their partner, whose nil rate band then increases to £650,000.

There are ways to mitigate against paying too much IHT such as giving away assets then living for 7 years, or investing in assets which benefit from business property relief. For more information contact Purely Probate solicitors.