The inheritance tax gap has grown to £600m in 2016/17, rising 50% from £400m five years ago in 2012/13, according to new statistics published by HMRC.
Private client law firm Collyer Bristow has said that complex rules around IHT must be simplified in order to close the gap.
Total IHT take jumped 13% to a record high £5.3bn last year, up from £4.7bn in 2016/17.
Collyer Bristow partner James Badcock said: “The fundamental problem is that IHT is now so complicated that innocent taxpayers are making honest mistakes and underpaying tax.
“The rules are sometimes so irrational that there is an element of ‘accidental evasion’ by those who don’t have professional advice. The new main residence nil rate band was intended to take normal people out of inheritance tax but it is so complex that people are missing out in its benefits.
“If HMRC wants to close the tax gap it is crucial that IHT rules are simplified so that fewer errors are made and IHT is collected correctly."
The Chancellor has asked the Office of Tax Simplification (OTS) to carry out a consultation on in inheritance tax. The scope of this goes beyond simplification of the legislation and the administrative processes to open up issues about policy and fundamental aspects of how inheritance tax works. The OTS will publish its report in Autumn this year.
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