Data reveals significant decrease in inheritance tax receipts
Data published recently by HMRC has revealed that there has been a significant drop in inheritance tax (IHT) receipts.
According to the data, HMRC collected £5.2 billion in IHT during 2019/20. This represents a decrease of 4% (£223 million) on 2018/19. The data covers the 2019/20 tax year and is based on payments received by HMRC.
The introduction of the main residence nil-rate band (RNRB) is cited as a cause for the decrease.
Commenting on the RNRB, Clare Moffat, Head of Intermediary Development and Technical at insurers Royal London, said: 'If you are a cohabiting couple this will not apply to you.
'In addition, the RNRB can only be used for direct descendants. This means that if you are single, have no children and your property is passing to a nephew that might be your full-time carer, then your estate would only be able to claim the nil-rate band of £325,000. Careful estate planning is vital to avoid nasty shocks and potential huge tax bills.'