The amount of inheritance tax expected to be paid by families in the next few years will reach a level higher than at any time since the early 1970s, according to calculations by the Institute for Fiscal Studies.
The respected think tank found that if the current inheritance tax arrangement – where 40pc tax is applied to assets above £325,000 per person, or £650,000 per married couple – remained in force, receipts would reach a 45-year high in four years’ time, by 2018.
Its research focused on the amount of inheritance tax raised as a proportion of all tax income, stretching back as far as records were readily obtainable.
“This would bring receipts as a share of national income to a level slightly above the previous peaks in 2007–08 and 1986–87, as shown in the figure below, and would be the highest level of receipts since at least 1973–74,” the IFS concluded.
The IFS added that the numbers of those paying IHT were also poised to quadruple, from just 2.6pc of those dying in the 2009-10 tax year to 10pc in 2018-19 (the red line, above).
The increased tax take derives from growth in the economy but primarily from the predicted rise in house prices.
If your assets amount to more than £325,000 each then you should talk to us and we can provide some alternatives to your family having to sell your assets to pay the tax bill after your death!