Inheritance Tax Hits New Annual Record

INHERITANCE TAX HITS NEW ANNUAL RECORD

• Inheritance Tax receipts from April 2024 to February 2025 have reached £7.6 billion.
• This amount is £0.8 billion higher than the same period last year.
• Last year’s total of £7.5 billion was previously the record.

The latest data concerning tax receipts has been published by HMRC. It showed Inheritance Tax has surged to a new record, with taxpayers contributing a staggering £7.6 billion so far this year, surpassing the record sum paid during last tax year. Although Inheritance Tax isn’t the most common tax, those affected feel the impact, especially if they weren’t expecting the bill. High house price growth and frozen tax thresholds, (held until at least 2030), have been significant factors in drawing more families into the Inheritance Tax (IHT) bracket.

In our last Blog we asked ‘Will pensions be the saviour of AIM?‘ With the recent announcement that pensions will be subject to Inheritance Tax from 2027, the number of people paying IHT is expected to rise. However, there are strategies to mitigate the impact. One such strategy is using an AIM ISA.

AIM ISA EXPLAINED

To qualify for 100% relief from Inheritance Tax:

• your money needs to have been invested in the shares of qualifying AIM companies for at least two years.
• it should then become IHT free, provided you still hold them on death, and they remain IHT qualifying.

From April 2026, AIM Shares will only benefit from 50% relief as opposed to 100% relief currently. This means AIM shares will be taxed at an effective 20% Inheritance Tax rate from 6th April 2026.

For more information see our AIM ISA Explained page.

ISA TRANSFER

Don’t forget:

• The ISA deadline is 5^th April 2025. This means if you wish to utilise your £20,000 ISA allowance this tax year, the money must be invested by the end of the tax year, which as ever is 5^th April, however, this year it falls on a Saturday which may mean that you need the account to have been opened before then.
• If you have not used any of your allowance by 5^th April, you will lose the unused allowance forever.
• You can transfer previous ISA allowances (all or part depending on your ISA manager) to a different ISA manager if you wish to at any time. Fundamental accept ISA transfers.

CHOICE OF MARKETS TO INVEST IN

At Fundamental Asset Management, you can transfer existing ISAs as well as fund new ISAs into the following main market and AIM portfolios but please not, only AIM portfolios will help mitigate IHT:

MINIMUM INVESTMENT

DEADLINES FOR FUNDAMENTAL

Existing clients: 5th April.
New clients: 2nd April at the latest (assuming all information needed has been provided).

FIND OUT MORE

To find out more about our products, please speak to our Business Development Manager, Jonathan Bramall, via email [email protected] or phone 01923 713 894.