Inheritance tax rules are changing next year – 230,000 people set to be affected

Inheritance tax does not have to be paid if an estate is worth less than £325,000.

In the past, Britons have still had to inform HMRC, however this is all about to change.

According to HMRC this will have a “positive impact” on an estimated 230,000 non-taxpaying excepted estates by simplifying the information that needs to be provided.

Not only will this reduce administrative burdens on families at a difficult time when a family member has passed away, but it should also make life easier for thousands of solicitors.

On its website, HMRC details that it has also made some alterations to the relevant monetary limits allowed.

• The limit for the aggregate of chargeable transfers and exempt ‘normal out of income’ transfers made prior to death is increased from £150,000 to £250,000
• The limit for chargeable trust property is increased from £150,000 to £250,000

HMRC said the measure will reduce inheritance tax reporting burdens for more than 90 percent of non-taxpaying estates that require probate or confirmation.

Meanwhile, Britons are being urged to do their sums so that they are not stung by by the taxman when it comes to giving money over the festive period.

HMRC has introduced new guidance to help people avoid getting caught out if they plan on giving money, property or assets to their family members this year.

How to avoid paying inheritance tax on gifts:

Check your list to see where the running total goes over the £325,000 threshold. People need to pay tax on:

Gifts that are exempt from a 40 percent tax bill include assets passed to a spouse or civil partner, gifts to charities, and gifts that are made seven years before the person dies.

Other exemptions include gifts of £3,000 or less in any tax year, small gifts of £250 or less and wedding and civil partnership gifts.