LONDON: The amount of money raked in by the Treasury from inheitance tax has soared by 70 per cent in the last five years, new findings reveal.
Last year, HM Revenue and Customs collected £4.6billion from inheritace tax, compared to £2.69billion in 2010, data from the Office for National Statistics reveals.
While the threshold for paying IHT frozen at £325,000 since 2009, soaring property prices have dragged an increasing number of middle-class households into paying the death duties.
In the past 12 months alone, inheritance tax revenues soared by 21 per cent to £4.4billion, compared to just under £3.8billion a year earlier.
Under a proposed Government scheme, households with estates worth over £2million could be subject to a £20,000 probate fee, instead of the current rate of £215.
At present, the threshold for inheritance tax is £325,000, as it has been since 2009.
Commenting on the Treasury’s rising inheritance tax revenues, Tim Fullerlove, Partner and trusts and tax specialist at law firm Wilsons, said: ‘Inheritance tax was originally intended as a tax on the very wealthy, but it has now become a general tax for a large proportion of the middle classes.
‘With the increasing value of property, it is no longer just the large windfalls of inheritance from estates that are being taxed.
‘As the threshold has stayed at a fixed rate for almost seven years, individuals who were not originally intended to be taxed are now facing significant bills because of the rise in property prices, particularly in London and the South East of England.’
In his Budget last summer, Chancellor George Osborne announced plans to allow parents and grandparents to leave homes for their children worth up to £850,000 from 2017, rising to £1million by 2020.
Children or grandchildren where a single parent owns the property won’t receive the full inheritance tax benefits as those who are married or in a civil partnership.
