Inheritance Tax Update
New research by the Institute for Fiscal Studies (IFS) shows that 10 percent of estates in the UK will face Inheritance Tax (IHT) by 2018. This is a substantial growth – just 2.6 percent of estates were charged IHT in the 2009-10 tax year. The trend is expected to occur as a result of the growth of house prices in the south-east and the fact that the nil rate band has not increased for eight years. In recent years the financial crisis and the introduction of the transferable nil-rate band affected the amount of IHT charged in the UK. Inheritance Tax currently accounts for £3.5 billion of tax revenue; by 2018-19 it is expected to grow to £5.8 billion. IHT is charged at 40 percent on assets above £325,000 per person, or £650,000 per married couple.