New data comes as Chancellor Rachel Reeves mulls over an increase to the tax in October's Budget
In the 2021/22 tax year, 4.39% of UK deaths resulted in an Inheritance Tax charge, an increase of 0.66 percentage points on the previous tax yearin Britain is “gathering pace”, according to data released on Wednesday, with the proportion at the highest level in five years.– an increase of 0.66 percentage points since the previous tax year, figures unveiled by HM Revenue and Customs show.
“A Budget IHT crackdown on top would certainly ruffle some feathers, as many savers believe that as they have paid tax in some way on their wealth already, taxing some of those assets again at 40 per cent as they are handed over at death is hard to justify.” Crucially, there’s normally no tax to pay as long as the value of the estate is below £325,000, or everything over this threshold is left to a spouse, civil partner, a charity or a community amateur sports club.
This means that as the threshold is £325,000 and if your estate is worth £400,000, you only pay 40 per cent on £75,000. You can also give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate, even if you do pass away within seven years.Any gift is tax-free if you live for at least seven years after giving it. If you die within seven years, the gift counts as part of your estate and tax will be due on a sliding scale.
If you die before the age of 75, your beneficiaries could get the money entirely tax-free. If you die after the age of 75, your family will pay income tax on the money.
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