Inheritance tax take smashes the £5bn barrier

THE amount of inheritance tax paid by bereaved families in a year has broken the £5billion barrier for the first time.

Figures from HM Revenue & Customs yesterday showed a record £5.1billion of IHT was collected over the last year.

This represents a jump of 9 per cent on the previous year. Experts say soaring property values over the last few years and the long freeze in the IHT threshold mean a growing number of estates are being hit by the deeply unpopular tax.

Until recently IHT has been charged at 40 per cent on estates worth more than £325,000 or £650,000 for couples.

This threshold was frozen from 2009 until April this year, when it was hiked to £850,000 for couples wanting to pass their main family home onto their children or grandchildren. The equivalent allowance for a single person was increased to £425,000, following a move by George Osborne in the 2015 budget. The Tories have promised to raise the threshold to £500,000 for single people and £1million for couples by 2020/21.

It came as it emerged a hike in interest rates may be just around the corner after Bank of England chief economist Andy Haldane revealed earlier this month he is likely to vote for a rise later this year.

Meanwhile, Chancellor Philip Hammond’s bid to balance the books received an early boost with Government borrowing falling to the lowest level in almost a decade last month. The ONS said the deficit fell by £300million to a lowerthan-expected £6.7billion in May, in contrast to the same month last year.

‘Greater resilience than expected’