IHT boost for Treasury coffers

The money the Treasury receives from inheritance tax (IHT) has increased for the third year in a row, according to figures from the Office for National Statistics (ONS). In 2012-13, it totalled £3.147 billion – a rise of 8% on the previous year and the highest figure since the recession started in 2007.

The money the Treasury receives from inheritance tax (IHT) has increased for the third year in a row, according to figures from the Office for National Statistics (ONS). In 2012-13, it totalled £3.147 billion – a rise of 8% on the previous year and the highest figure since the recession started in 2007.

It is thought the increase was partly due to people saving more of their money during the economic downturn rather than spending it. The ONS believes that an increase in the value of shares and other investments could be another factor. The ONS report says: “Properties, household savings and, to a lesser extent, equities make up the bulk of estates and hence receipts tend to reflect any fluctuations in these economic indicators. The level of receipts will also have been affected by the freeze in the inheritance tax threshold, which has been held at £325,000 since April 2009.”

The ONS figures highlight the need to plan ahead in order to ensure that as much of your estate as possible is passed on in a tax efficient way to your beneficiaries, rather than being taken in tax. A little careful planning now in relation to things such as wills, trusts and your overall financial arrangements can prevent thousands of pounds being lost in the future.