HMRC collected a “record high” £5.3bn through inheritance tax (IHT) last year, according to leading private client firm Wilsons.

The latest figures revealed a 13% increase over the £4.7bn paid in IHT in 2016/17, caused by the “freeze” on the IHT threshold of £325,000 resulting in more families being hit by tax bills.

Wilsons stated that the increase in IHT comes on the back of residential property prices inflating over the past several years, coupled with other asset price increases.

The firm recommended that individuals seek professional advice on estate planning to ensure their estates remain as “tax-efficient as possible”.

However, there are certain steps that can be taken to alleviate the amount of IHT paid. These steps include; making gifts from ‘surplus income’ as regular gifts are exempt from IHT provided a certain criteria is met, making gifts or loans to help family members buy a property, using pensions as tax-planning vehicles and seeking advice to structure wills in a tax-efficient way.

Wilsons partner Torsten White commented: “Substantial portions of individuals’ wealth is now being taken by HMRC through IHT. The value of that IHT, somewhat worryingly, continues to rise at an alarming rate.

“With the residence nil rate band increasing just £25,000 next year, and the slowdown we are seeing in inflation, it will be interesting to see whether tax take from IHT starts to level off in coming years.”

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