In the 2018 calendar year, inheritance tax (IHT) receipts reached £5.221bn, illustrating a steady increase when compared to the £4.8bn figure recorded a year earlier, according to the statistics published in HM Revenue & Customs (HMRC) most recent HMRC Tax and NIC Receipts report.
However, financial advice firm NFU Mutual has revealed that the new prospect of new probate fees could trigger a spike in receipts this year (2019) as executors rush to beat the April deadline.
NFU Mutual chartered financial planner Sean McCann labelled IHT as “deeply unpopular and fiendishly complicated”, adding that recent changes have contributed to the problem and in many instances the “complexity” of the rules results in families “missing out”.
“IHT receipts have been maintaining a record pace for a couple of years. Executors who are wary of the proposed new probate fees, which would see some estates pay thousands more from April, may choose to rush through the paperwork before they are implemented,” McCann said.
According to the financial planner, the proposed new probate fees could “mean a bumper end to the tax year” for the Treasury, as the last time a hike in probate fees was proposed, there was a spike in IHT receipts from March to May 2017. The increase occurred as people attempted to avoid an increase that never happened.
McCann concluded: “IHT rules are complex and filling in the forms is often not straightforward, so it’s critical that DIY executors take their time and seek advice if in doubt.”
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