Every farmer should have a Lasting powers of Attorney
Philip Whitcomb | 15.08.2018
10.08.2018 Philip Whitcomb
HMRC has confirmed that there has been a significant increase in the amount of Inheritance Tax (IHT) received in tax year 2017/18, with receipts increasing to approximately £5.2bn.
Whilst the receipt of IHT has increased year on year by approximately 10%, the decision to freeze the Nil Rate Band at £325,000 (which is the allowance available on the death of an individual) can arguable be seen as unfair in the face of such an increase. Through the introduction of the well documented Residence Nil Rate Band (RNRB), the Government has argued that due to this new relief (introduced in April 2017) the average family will actually receive a net benefit. However, again it is possible to criticise the RNRB as it can only be claimed against your estate if you leave a qualifying residential interest to direct descendants (i.e. children) or into specific types of trust. This narrows the application of the RNRB dramatically, which again starkly exposes the decision to currently freeze the NRB (particularly in light of the increased IHT revenue).
The increase in IHT outlines the necessity for sensible and professional IHT planning in order to prepare carefully for the future. By taking the appropriate professional advice from qualified advisors, a family faced with a bereavement can rest assured that the IHT position has been planned for appropriately, which will ultimately result in a benefit to the surviving family.