There are opportunities available both before and after death to undertake Inheritance Tax planning and mitigate what could otherwise be a substantial bill.
In statistics published by HM Revenue and Customs it is apparent that in the last tax year (2017/2018) Inheritance Tax revenue exceeded £5 billion for the first time ever.
This is an increase of £0.4 billion in one year, despite the introduction of the new ‘Residential Nil Rate Band’ (RNRB). The RNRB effectively provided an additional £100,000 of tax free allowance per person for those who qualify for the relief.
Inheritance Tax revenue has increased year on year since 2010 and receipts in 2018/2019 are likely to double those in 2010/2011 if the current trend continues.
With that in mind, it is important that you seek professional advice in preparing your Will to ensure that your Will is tax efficient, and that you are fully aware of your own Inheritance Tax position and the exemptions and reliefs available.
It is equally important that, as a beneficiary of an estate, you take advice as to whether the Will of the deceased was tax effective and whether any changes could be made retrospectively (by way of a Deed of Variation), which might improve either the Inheritance Tax position of the estate, or your own Inheritance Tax position (perhaps by bypassing a generation and transferring the gift to your children).