In the future, middle and working class families may also have to contribute.
HM Revenue & Customs ("HMRC") have received a record-breaking £5.2bn from Inheritance tax ("IHT") for the 2017/2018 tax year, an 8% increase, with London and the South East being the highest paying areas.
Rebecca Goldring, a manager in Blick Rothenberg's private client team said, 'As expected, the burden of IHT lies largely in the south of England with London and the South East being the highest paying areas.'
'With the surge in property prices in the last decade, particularly in those regions, the increase in collections was predictable and I envisage further rises in the years to come.'
She added, 'We will likely also see a shift in the demographic of those who pay the tax. IHT was once a tax that only the rich and super rich actually paid and was not a concern for the majority. In reality though, largely owing to housing price increases, we now expect that in the years to come the middle and working class families may also have to pay the tax.'
'Another area that was seeing an increase in revenue collections was the non-dom demographic.'
Rebecca said, 'This is not however surprising, particularly as from April 2017 we saw a wave of new IHT rules for example the introduction of IHT charges for overseas individuals owning UK residential property through non-UK holding structures.'
She added, 'With the Government pledging earlier this year to review the current IHT system with a view to making a ‘particularly complex’ tax ‘fit for purpose’, we expect to see further changes.'
Rebecca said, 'Such changes could include restricting the availability of the current reliefs and exemptions and the ways in which people can efficiently pass on wealth to the next generation during their lifetime.'
For more information, please contact Rebecca Goldring.