A record of £1.5bn has been collected by HMRC through inheritance tax receipts this year. In comparison to last year’s collected inheritance of £4.7bn, this is an increase of 9% as a result of growing property tax values and frozen threshold rate of £325,000 since April 2009.
From April, a nil-rate band for a family home was introduced and will increase over the following four years. This will allow a further £100,000 on the family home to be passed onto direct descendent tax-free.
The new nil-rate band will increase up to £175,000 for the year 2020/21.
If the deceased had down-sized to less valuable residence or had ceased to own a residence on or after 8 July 2015, the new nil-rate band will still be available as long as they leave their smaller residence to their direct family. However, buy-to-let properties do not qualify for the relief.