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Patricia Mock, tax director at Deloitte, comments on the latest IHT figures relating to estates from 2014/15 and IHT receipts in 2016/17

28 July 2017

“For 2014/15 estates the overall IHT charged was up on the previous year from £3,371m to £4,214m – an increase of 25%.

“The number of estates where a grant of representation was needed in 2014/15 (around 50% of all estates) is up to around 285,000 compared to around 268,000 in 2013/14 – an increase of 6.4%. This is due to a spike in the death rate in late 2014.

“However, the percentage of those estates which were liable to IHT after reliefs were taken into account did not change significantly, increasing from 7.2% to 8.1%, with 23,250 2014/15 estates being liable to IHT. So although the overall increase in taxpaying estates is 21% this is largely caused by the increased number of deaths. The freezing of the nil rate band at £325,000 will of course play some part in the increase as asset values, particularly property in parts of the UK, increase. From 2017 onwards the residential nil rate band will start to be phased in which will of course affect IHT receipts; the relief is estimated to reduce IHT collections by £940m per annum by 2020/21 when it is fully implemented.

“Also published are IHT receipts in 2016/17 which broadly relate to 2015/16 deaths. These show that receipts have gone up from £4,673 in 2015/16 to £4,840 in 2016/17, an increase of only 3.5% rather than 22% in the year before. This seems to indicate that the 2015/16 increase was a one-off”.

End

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