Inheritance Tax – another record smashed
Inheritance Tax receipts higher than last year and on course for a record amount over this financial year
The latest data on tax receipts from HMRC shows that Inheritance Tax (IHT) receipts for April 2023 to December 2023 of £5.7 billion were £0.4 billion higher than in the same period a year earlier.
The 7.5% increase means the Treasury is on course to take record receipts of about £7.6 billion from IHT in the 2023/24 tax year, after surging to an all-time high of £7.1bn in 2022/23 – a £1 billion increase on 2021/22. This all results in more and more families are having to pay IHT.
Higher receipts since March 2022 are due to a combination of higher volumes of wealth transfers following recent IHT-liable deaths, recent rises in asset values, and the UK government’s decision to maintain IHT tax free thresholds at their 2020 to 2021 levels, up to and including 2027 to 2028.
A proven, effective and straightforward tax planning method to help mitigate Inheritance Tax is by investing in the shares of qualifying companies listed on AIM, which benefit from Business Relief (‘BR’). What this means is if you buy and hold shares in such companies, you could potentially pass on those shares IHT free provided that:
• the shares are held for at least two years and are still held on death
• the company still qualifies for BR at the time of the investor’s death
You could buy as few or as many shares as you wish. There is no upper limit or allowance. Provided the above conditions are met, the whole value of the investment – be it £10,000 or £10 million – should attract 100% IHT relief.
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Fundamental’s AIM IHT ISA and General portfolio is a discretionary investment management service where clients can obtain 100% mitigation from Inheritance Tax, benefit from the capital growth and income afforded by the AIM market and retain control of their assets.
You can find out more about AIM ISAs here: ‘AIM ISA Explained’.
Fundamental now offers its standard AIM IHT Growth Portfolio, as well as its newer AIM IHT Income Portfolio service.
All portfolios are managed by the same team of managers and researchers that have delivered exceptional returns since the firm’s founding in 2004.