The latest HM Revenue & Customs (HMRC) figures show that over 24,000 estates in the UK pay inheritance tax each year and, with many estates not taking advantage of the Residence Nil Rate Band (RNRB) introduced in April 2017, the UK government collected £1.9 billion in Inheritance Tax (IHT) in the first four months of the tax year alone.
According to information obtained under the freedom of information act by NFU Mutual, only 5,420 tax paying estates claimed RNRB tax relief during the 2017/2018 year, with many not taking full advantage of the available tax breaks because of their perceived complexity.
Inheritance tax (IHT) allows individuals to pass on assets of up to £325,000; the ‘nil-rate band’, to the beneficiaries of their estate before paying 40% Inheritance Tax.
The ‘Residence Nil Rate Band’ added a further £100,000 (now £125,000) to the nil-rate band when the principal family residence passes, on death, to a direct descendant.
Don’t let your family and loved ones miss out on their inheritance; make sure both you and they are aware of IHT regulations and available tax breaks applying to your estate.
