The UK government is set to reap an additional £1.2 billion from inheritance tax (IHT) this year, according to new data released by the Office for Budget Responsibility. The surge in IHT revenue comes as thousands more families face penalties due to changes in HM Revenue & Customs' (HMRC) assessment process.
HMRC has introduced a new 122-question form that requires estates to provide detailed information about their assets, including property and investments. This increased scrutiny is causing concern among families who may inadvertently trigger large tax bills. 'This is a complex and time-consuming process,' said John Roberts, head of private client services at accountancy firm Smith & Williamson.
Experts warn that families may be unaware of the new rules, which could result in them being hit with substantial tax liabilities. 'HMRC's increased scrutiny is welcome, but it must be balanced against the need to avoid penalising families who are genuinely trying to comply,' added Roberts.
The Bank of England has kept interest rates on hold at 0.75%, citing concerns over Brexit uncertainty and a sluggish economy. However, experts warn that this decision may have unintended consequences for savers, who may see their returns dwindled further. 'The lack of clear direction from policymakers is affecting consumer confidence,' said Andrew Bailey, governor of the Bank of England.
Inheritance tax penalties can have significant implications for families, particularly those with substantial assets or complex financial arrangements. With thousands more families facing IHT penalties, it's essential to understand the risks and take proactive steps to mitigate them. Families should consider consulting a qualified financial adviser to ensure they are adequately prepared for the new rules.