IHT receipts fall for the first time since 2009
Following a decade of steadily increasing Inheritance Tax (IHT) receipts, the amount of IHT collected over the 2019/2020 tax year fell for the first time since 2009. HMRC data reveals that IHT receipts fell by 4%, or £223m less than in the 2018/19 tax year. The introduction of the main residence nil rate band (RNRB), which was phased in over four years and came into full effect in April 2020, is considered to be one of the main drivers behind the fall.
RNRB in brief
The RNRB is an additional IHT allowance available to those who leave their main residence to their direct descendants (children, stepchildren or grandchildren). The value of the allowance is now £175,000 and, when combined with the nil-rate threshold of £325,000, has the potential to raise an individual’s overall IHT allowance to £500,000 (unless the estate exceeds £2m, at which point the RNRB starts to taper). The RNRB, like the nil-rate threshold, is transferrable to your spouse or civil partner on your death, giving rise to a potential IHT allowance of £1m. Beyond these thresholds, IHT will usually be payable at 40%.
Passing on your hard-earned wealth
If you are looking to pass on your assets as tax-efficiently as possible, we can work with you to take advantage of all the allowances available to you, leaving more of your hardearned cash for future generations.
It is important to take professional advice before making any decision relating to your personal finances. Information within this page 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.
Tax and Estate planning are not regulated by the Financial Conduct Authority
The value of pensions and investments can fall as well as rise. You may get back less than you invested.
Will writing is not regulated by the Financial Conduct Authority.
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