Introduction
Often described as ‘the most hated tax’, Inheritance Tax (IHT) is undergoing a major transition in the UK, with the Chancellor of the Exchequer introducing several significant changes in October 2024.
Currently, around 4% of estates are subject to it, but this percentage is rising and is expected to continue doing so.
One of the most impactful rules regarding Inheritance Tax is the freezing of the thresholds. Introduced in 2009, the nil-rate band has been fixed at £325,000, significantly contributing to the increase in estates subject to IHT. The announcement at The Budget to extend this policy until 2030 ensures its continued influence in the medium term.
Other recent proposals relating to non-domiciled individuals, and adjustments to Agricultural and Business Property Reliefs, are all likely to drive the traffic in the same direction. It’s still a few years away but the inclusion of pensions in estate valuations for IHT in 2027-28, could also add an estimated 10,000 estates to the IHT.
We submitted Freedom of Information (FoI) requests to HMRC to dig deeper into the topic.
The first half of the report analyses seven years of data across the UK’s 121 postcode areas, highlighting emerging trends and context for the future.
Our study’s second half highlights some predictions for the future.
estimated estates to the IHT
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