Gill Millen, Managing Director quoted in Mail on Sunday 9th October 2022
£585m was collected by HMRC through Inheritance Tax (IHT) in March 2022* – the highest single month on record, says Bowmore Wealth Group.
Bowmore says that key drivers of the increase has been the rapid rise in residential property prices and a freezing of the tax threshold, both of which have seen more estates become liable to pay IHT.
There have been increasing concerns that the IHT net is catching more of ‘Middle England’.
More families are being dragged into the IHT net each year, as the threshold for paying the tax has not been raised from £325,000 since April 2009. If this figure had kept pace with inflation, the threshold would now stand at £500,000.
In April 2009 the average UK property was worth £183,000. That figure now stands at £277,000**, with that rise forcing more and more families to pay IHT each year.
Gill Millen, Managing Director of Bowmore Financial Planning, says: “Over the past 13 years, IHT has become a significant income stream for HMRC. What was intended to be a tax only on the truly wealthy has become a general tax on ‘Middle England’.”
“13 years ago £325,000 was a reasonable threshold for IHT. That threshold is no longer fit for purpose and the problem is only getting worse as house prices continue to rise.”
“The Government should look at increasing the threshold in line with inflation to make sure that normal, middle class families are able to pass on wealth without being taxed unnecessarily.
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