Rising property prices, inflation and frozen tax thresholds contributed to the high intake for the Treasury this period as more estates are pushed above the threshold.
Julia Rosenbloom, tax partner at Tilney Smith & Williamson explained that if people want to mitigate their IHT bill, they could consider making some gifts now, of cash or investments (extra care is required before gifting the house).
If someone were to die within seven years of the gift, the recipient would be liable to IHT so one’s age will need to be taken into account.
However, if someone survives at least three years, the rate of IHT payable on the gift reduces, depending on the length of survival.
For example, if they survive between three and four years, IHT would only be payable at a rate of 32 percent on the value of the gift, rather than the inevitable 40 percent if no gift is made.