Current landscape for inheritance tax planning

HMRC may be suffering a reduction in revenue from income tax during the pandemic but this is not likely to be the case with inheritance tax. An unfortunate effect of the pandemic is not only have more people died but many of those people will have died without taking any inheritance tax planning action.

Due to increasing property and investment values and a frozen nil rate band receipts from inheritance tax hit a record high of £5.4bn in 2018-19. This dipped to £5.2bn in 2019-20 mainly it is thought because of the increasing effect of the residence nil rate band which in 2020-21 hit its maximum of £175 000. However in 2020-21 the Office for Budget Responsibility (OBR) has forecast that the number of estates subject to inheritance tax will increase by 20%. Further it is becoming apparent that more tax is being...