Millionaire Rishi Sunak escapes £300m inheritance tax bill – while HMRC targets you and me | Personal Finance | Finance

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Households are on course to hand over £7.3 billion in the hated “death tax” to HMRC this financial year, in yet another new record. More and more of us are getting caught out as the inheritance tax (IHT) nil-rate band has been frozen at £325,000 since 2009.

Since then, house prices and stock markets have risen rapidly, boosting family wealth and the Treasury’s tax take.

Hopes that Chancellor Jeremy Hunt would axe IHT in his recent Budget came to nothing, and the Labour Party could even step up the assault on wealth if it wins the next election.

Research by Canada Life shows that 28 percent of over-55s believe their estate will be taxed on death and 22 percent are worried about the prospect. That’s half of us, in total.

Many could face bills running into tens or even hundreds of thousands of pounds, with IHT charged at a punitive 40 percent on all liable assets.

The tax is notoriously complicated and many are also worried about the legalities involved and whether they will understand the process.

Worryingly, HMRC is cracking down on IHT, by digging ever deeper to unearth errors and underpayments. Woe betide those who get it wrong, as the taxman has the power to impose harsh penalties who get it wrong.

Currently, just four percent of estates pay IHT but that is likely to rise, said Stacey Love, tax and estate planning specialist at Canada Life. “House prices have increased significantly over the past 30 years or so, and IHT thresholds will remain frozen until 2028 at the earliest.”

Yet Rishi Sunak has nothing to worry about. His wife Akshata Murty is worth a fortune, but almost none of her wealth will fall into HMRC‘s hands.



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