Inland Revenue Boost From Inheritance Tax
The inheritance tax (IHT) threshold freeze has boosted government revenues from the tax by 14%, TIC Financial Services (UK) Ltd said.
The threshold over which IHT is due, frozen at £325,000, has already created a growth in tax receipts of 14% from 2009/10, TIC said.
In March 2011, Her Majesty's Revenue and Customs (HMRC) collected £2.7bn, up from £2.4bn in March 2010.
TIC Financial Services (UK) Ltd stated that as property prices recover after the crash of 2008, more properties will exceed the threshold and push beneficiaries of estates into the tax.
HMRC figures show a drop in IHT income between 2007/08 and 2008/09, from £38bn to £28bn, as property prices plummeted.
Total IHT receipts fell again from £28bn in 2008/09 to £23bn in 2009/10, but in a sign the property market is recovering, last year IHT receipts began to rise again.
Paul Roome, Managing Director at TIC Financial Services (UK) Ltd, said: "The kind of houses, particularly in the south of England, that are caught by IHT can be very modest."
In September 2009, the government created an interest rate of 3% on IHT paid in instalments, whereas previously there was no penalty for gradual repayment. Paul said this has added to IHT income.
For more information about this article, or any financial services matter, contact Paul Roome, TIC Financial Services (UK) Ltd, 8 China Street, Lancaster, LA1 1EX Tel: 01524 541 511 Email: paul.roome@tic-financialservices.com.
Or visit their Feature on thebestof Lancaster at: http://www.thebestof.co.uk/local/lancaster/business-guide/feature/tic-financial-services-uk-ltd/87723
