In 2018, inheritance tax (IHT) receipts reached £5.22bn, illustrating a steady increase when compared to the £4.8bn figure recorded a year earlier, according to statistics published by HM Revenue & Customs (HMRC).
However, NFU Mutual has revealed that the prospect of new probate fees could trigger a spike in receipts this year (2019) as executors rush to beat the increased cost April deadline.
NFU Mutual’s Sean McCann labelled IHT as “deeply unpopular and fiendishly complicated”, adding that recent changes have contributed to the problem and in many instances the “complexity” of the rules results in families “missing out”.
“IHT receipts have been maintaining a record pace for a couple of years. The proposed new probate fees could “mean a bumper end to the tax year” for the Treasury, as the last time a hike in probate fees was proposed, there was a spike in IHT receipts from March to May 2017. The increase occurred as people attempted to avoid an increase that never happened.
McCann concluded: “IHT rules are complex and filling in the forms is often not straightforward, so it’s critical that DIY executors take their time and seek professional advice if in doubt.”
There are, of course, mitigation strategies that can be used. Some maintaining control and effective over a longer term – some more complex but more efficient in the short term – and some with a higher investment risk factor.
Please contact us if you’d like to discuss options for your particular circumstances.