HMRC raises a record £7.1bn in inheritance tax – how could you protect your wealth?
By Alex Davies – WealthClub
HMRC raised a record £7.1 billion in inheritance tax (IHT) receipts in the year to March 2023, figures released on 25 April show. That is £1 billion more than in the same period last year.
The upward trend is expected to continue. With the freeze on inheritance tax nil-rate bands until 2028, rising house prices and inflation, IHT receipts are forecast to reach an all-time high of £8.4 billion in 2027/28. Meanwhile, more and more families are being dragged over the threshold at which the tax becomes due.
How might you pass on more of your wealth?
There are several options. One that could be of interest to experienced investors is investing in companies that qualify for Business Property Relief (BPR). Unlike gifts or trusts, the investment potentially becomes IHT free after two years (instead of seven) and you retain ownership and control of the money, so could make withdrawals if needed.
On the flipside, BPR-qualifying investments are high risk – you could lose your capital. These investments must remain qualifying and also still be held on death. Remember, tax rules can change and benefits depend on circumstances.
EIS and SEIS
Other than BPR-qualifying investments, if you invest in EIS and SEIS it is worth remembering these should qualify for IHT relief after two years of investment – part of the generous tax package they offer.
EIS and SEIS should not be used exclusively as an IHT planning tool. Like IHT portfolios, EIS and SEIS are high risk and you could get back less than you invest.
For more information in investing with OSH Media as a SEIS/EIS investor – Contact us
Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest.
