Record tax take
FT Article – Comment by John Halley
In 1986, the Labour politician Roy Jenkins said “Inheritance tax, is broadly speaking a voluntary levy paid by those who distrust their Heirs more than they dislike the Inland Revenue”.
Official statistics released last week indicate that if Mr Jenkins was correct then there are significant levels of distrust among families, as the amount of inheritance tax collected by HMRC has more than doubled since 2009-10, and is anticipated (according to the Office for Budget Responsibility) to increase by a further c. 30% by 2020-21.
Increases in the value of residential property are one factor behind the increase, but a general lack of appreciation of the position by individuals continues to play its part.
“Inheritance tax, is broadly speaking a voluntary levy paid by those who distrust their Heirs more than they dislike the Inland Revenue”.
By planning early, many families are able to reduce or extinguish altogether the inheritance tax liability on their estates through a variety of means. The use of a lifetime strategic plan can assist in identifying sums of money which could be gifted without jeopardising the financial security of the donor and, once use has been made of all available allowances and reliefs, tax-efficient Wills and trusts, and the current rules in relation to pensions (which mean these are now being used more widely as inter-generational vehicles), life-insurance can be cost effective in many cases to provide liquidity to cover any residual liability.
John Halley, Executive Director