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Slowing House Prices and changes to Inheritance Tax – Start of a Fiscal Headache for HMRC

inheritance tax lawyers glasgow

For the first time in over a decade, HMRC has been hit by changes to Inheritance Tax rules introduced in 2017 and is also indicative of a slowing rise in house prices, according to John Carruthers of Oracle Law, Glasgow’s leading expert firm on Inheritance Tax.

Commenting, John Carruthers said:

“New figures released this week show that the amount of Inheritance Tax paid to HMRC in the tax year 2017-2018 has fallen from £5.19 billion to £5.18 billion.

“In the past 10 years, HMRC has enjoyed an Inheritance Tax bounty.  The nil rate band of £325,000 has remained the same for the last ten years and has not increased over time alongside the average wage.  The end result is a population with a higher income and higher levels of savings but not a higher nil rate band to off-set tax upon death, allowing HMRC to increase their income each year.

“This change may also be partly attributable to the fact that that house prices are rising slower than in previous years.  This, coupled with the introduction of the “residential nil rate band” in April 2017, which allows individuals with direct descendants to leave an additional £100,000 tax free and which is set to rise, could be the start of a fiscal headache for HMRC.”

Inheritance tax may be something that a lot of us think about, however in reality less than 5% of all estates are liable to pay tax to HMRC. If you think your estate may be large enough to be subject to Inheritance Tax upon your death, contact Stephen Mullan or John Carruthers at Oracle Law Solicitors for help and assistance with your estate planning.

 

 

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