5th September 2022
Allowed to use both tax-free allowances
In most cases, if you are married or in a registered civil partnership, you can pass on your assets to your partner Inheritance Tax-free. The surviving partner can then claim both tax-free allowances. If the first person to die leaves all of their assets to their surviving spouse, the surviving spouse will be entitled to an Inheritance Tax allowance of £650,000 (£1 million if they qualify for the RNRB). According to HM Revenue & Customs (HMRC) data, more estates in the UK are now paying Inheritance Tax than ever before.
PAYING INHERITANCE TAX UNEXPECTEDLY
Inheritance Tax receipts totaled £6.1 billion in the fiscal year 2021/2022, an increase of £729 million over the previous year. This 14% increase is the highest one-year increase in Inheritance Tax receipts since the 2015/16 fiscal year. The growth is the the ongoing freeze on the nil-rate Inheritance Tax band and the residence nil-rate Inheritance Tax band.
Many more families are discovering that the total value of their estate, as a result of rapid growth in house prices, savings, and other assets, is likely to be greater than £1 million at the time of death, implying that many more estates may be liquidated and Inheritance Tax may be due unexpectedly.
Visit us again tomorrow as we explore what you can do or contact Woodward Markwell for further information.
Source data:  https://www.gov.uk/government/statistics/inheritance-tax-statistics-commentary/inheritance- tax-statistics-commentary