Posted by James McNeile, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Inheritance Tax revenue rises by 15 per cent
New figures have revealed that the Treasury earnings from Inheritance Tax (IHT) have jumped £400million in the space of just 12 months.
A detailed analysis of HM Revenue & Customs (HMRC) data has found that IHT receipts passed £3billion in the 2012/13 financial year. The sum that flowed into Treasury coffers was 15 per cent more than the year before.
Further scrutiny of the figures showed that 17,900 estates paid the tax over the period and the average bill now stands at a little over £170,000.
Perhaps unsurprisingly, given the increasing house prices in the region, London and the South East accounted for more than half of the UK’s total IHT revenue. In the capital, the typical bill is almost 40 per cent higher than across the country as a whole – the average household being liable to pay almost £236,000.
These latest figures were published as debate continues to rage about George Osborne’s plans to radically overhaul the IHT rules.
From April 2017, those couples who are married or in a civil partnership will be able to pass on £1million tax-free where they leave a residence to a direct descendent. (The new relief will be tapered where estates exceed £2million).
The Chancellor says that the changes will reduce the number of modest homes affected by the levy and the Office for Budget Responsibility has indicated that the new rules may deprive the Treasury of around £1billion by the end of the decade.
Despite this, concerns remain that not everyone will be able to benefit from the new system, with particular questions raised about the fact that many childless couples will miss out.