Recent figures from the Office for National Statistics show inheritance tax (IHT) receipts increasing yet again. During 2013-14 the amount raised was a staggering £3.4bn which is an 8.6% increase compared to the previous year.
The main factors to the increase is down to rising house prices and the freeze of the IHT nil rate band at £325,000, which will remain at this level until at least 2019. Assets valued above the threshold are taxed at 40%.
Due to the increasing use of tax reliefs, over half of the estates eligible to pay IHT during 2013-14 managed to escape it. One such relief, which is growing in popularity year on year, is ‘Business Relief’ (formerly known as Business Property Relief) which has a key advantage if mitigating tax after a 2-year period, instead of the usual 7-year requirement with most other IHT planning alternatives.
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