Commonly referred to as “Britain’s most hated tax” inheritance tax (IHT) has been labelled confusing and unfair, with many calling for it to be simplified.

A review has been done by the Office of Tax Simplification (OTS) and their main conclusion was that a simple, streamlined, digital system for inheritance tax should be introduced by the government.

As part of the review, more than 3,500 people were asked to provide their views on inheritance tax. One of the biggest concerns that came out of the review was that the richest manage to avoid paying IHT because they pay advisers to help them find a way around it – for example, by putting assets into trusts. This leaves the middle class hit the hardest by the tax.

The latest tax receipts show that HMRC is on course to take £5.5 billion in IHT this tax year, with £3.3 billion taken between April and October.

However, despite the headline rate being payable at 40%, the rate actually paid peaks at 20%, falling to 10% for the largest estates. This is because larger estates are often covered by reliefs, whereas lower value estates which mostly consist of cash and residential property, do not.

There is also the point made that the wealthier can afford to give more away during their lifetime, as they don’t need it to sustain their lifestyle. This reduces their IHT bill when they die. And again, the middle classes are less able to do this.

The recommendations from the OTS review propose:

(Source: Office of Tax Simplification)

Looking for help with regards to inheritance tax?

Inheritance tax can be confusing – especially when it needs to be dealt with at a time when people are generally feeling stressed and vulnerable. It is for the executor of the Will, or their representative, to calculate the estate’s assets and gifts (using a professional valuer for anything worth over £500) and all the liabilities/debts.

Until IHT is paid and all the relevant forms submitted, probate cannot be granted and the assets of the estate cannot be distributed. However, the IHT must be paid within six months of the death, while the deadline for forms is within a year. So, you can see how the whole process can be difficult and confusing for people – which is why a lot of people prefer to get a probate professional to help them.

Thanks to a recent change in regulations, Accountants are able to help with probate – but only if they have the necessary probate authorisation – as Get Probate have.

If you’re looking for advice about probate contact us at Get Probate Limited on 0161 907 4044 or [email protected]

Whether you need to obtain a Grant of Probate or require a Full Probate service we can help you – and our fees are very affordable.