Inheritance Tax to be Collected While you are Still Alive…

The government is currently considering proposals that will see people having to pay inheritance tax before they actually die. The new initiative is aimed at wealthy people who avoid paying inheritance tax by designing and entering into schemes that protect their money specifically from this tax; many of which are offshore arrangements. Under the new rules, HM Revenue and Customs (HMRC) will be able to target these people and force them to pay their inheritance tax upfront, while they are still alive.

HMRC have stressed that people will only be targeted if they are deliberately trying to avoid inheritance tax, they will not target people that have their money in legitimate trusts and schemes. These new proposals have once again thrown inheritance tax back into the limelight. Currently, people who have estates valued over the £325,000 threshold have to pay 40% tax on the value over this limit. With the economy beginning to grow and house prices rising, many people’s estates are being pushed over this threshold and are consequently subject to inheritance tax. The government is under pressure to raise the threshold to protect middle-class people being hit by this tax. This is their latest attempt in taking a stance on tax avoidance. The fear is that innocent people will be affected and forced to pay the tax before it is due.