The UK government’s inheritance tax (IHT) receipts are on track to hit a staggering £9 billion by 2027, according to forecasts from the Office for Budget Responsibility (OBR). This sharp rise in UK Inheritance Tax (IHT) revenue reflects a combination of frozen thresholds and rising property values — factors that could impact many families who never expected to be caught in the IHT net.
What’s Driving the Increase in IHT Receipts?
The IHT nil-rate band has been frozen at £325,000 since 2009. As property prices and asset values have surged over the years, more estates are becoming liable for tax. The UK Inheritance Tax is charged at 40% on estates above the nil-rate band, and this threshold freeze, paired with inflation, is drawing more families into its scope.
According to a report by STEP, even modest estates may soon face an IHT bill unless proactive estate planning is undertaken.
How This Affects Families and Individuals
The growing tax burden isn’t just a concern for the wealthy anymore. Middle-income families, particularly those in the South East of England with high property values, could soon find themselves affected. It’s vital to understand your exposure and plan ahead.
At Care Accountancy, we’ve seen a rising number of clients looking for help with UK Inheritance Tax (IHT) planning. Simple steps like gifting, trust creation, and utilising the residence nil-rate band can offer significant savings if done in advance.
What You Can Do to Mitigate IHT
Navigating the UK’s inheritance tax landscape requires early planning. Working with a professional advisor can help identify tailored solutions, such as:
- Lifetime gifting strategies
- Use of trusts and exemptions
- Property and asset restructuring
Our team at Care Accountancy is ready to guide you through the available tax-efficient options. With the government’s IHT receipts rising steadily, the earlier you start, the more you can protect your family’s legacy.
Why Estate Planning Should Start Now
The trend is clear: more estates will be liable for UK Inheritance Tax (IHT) in the coming years. Don’t wait for HMRC to surprise you — start planning today to safeguard your assets.
For more insights, check out our blog on effective tax planning for UK estates and discover how we’ve helped hundreds of clients reduce or eliminate their IHT liabilities.
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