A specialist team has been established by HMRC to focus on the estates of wealthy deceased individuals to determine whether a greater Inheritance Tax (IHT) liability may have been due than originally calculated by estate executors.
Data has revealed that £326m was collected by HMRC as a result of targeted IHT investigations in the year to March 2022, the largest annual amount ever recovered. This represents a 28% uptick on the amount raised by investigators in the previous 12-month period.
Frozen thresholds
With IHT thresholds frozen until 2028, this inevitably means more people are likely to be drawn into the IHT net. Families collectively paid £6.1bn in death duties in 2021/22, up from £5.4bn the previous year. Monthly data up to December suggests the figure for 2022/23 will be even higher.
Complexity
Over 13,000 individuals have become embroiled in IHT investigations since 2019; although some bereaved families may have acted deliberately, many others are likely to have made innocent mistakes and fallen foul of IHT rule complexities. Two areas where mistakes commonly occur relate to the provision of lifetime gifts and the valuation of personal possessions.
If you need advice on any aspect relating to IHT please get in touch.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.