Inheritance Tax: Families may claim back 'thousands' from HMRC as house prices drop - how?

House prices across the UK have fallen in recent months: between June and July 2021, house prices in the UK fell 3.7 percent and were down 4.5 percent in England. This could have a big impact on estate planning as families will be able to reclaim Inheritance Tax if the value of their home falls between the date of death and a sale.

NFU Mutual explained the tax is based on the value of property at death and If the property is sold by the executors within four years of death at a lower value, overpaid IHT can be reclaimed from the Government.

This could end up affecting thousands as new FOI figures showed 3,630 families reclaimed IHT this way in 2020/21.

Even more reclaims could be to come as property prices “slump”, and the same rules could be utilised for losses seen on share sales.

The tax is paid on estates where the total value is over £325,000, with a tax rate of 40 percent charged on the parts of the estate valued over that threshold.

While IHT is designed to only impact wealthy families, decades of rising property prices has pushed more families into its threshold.

© GETTY Inheritance tax

IHT reclaims on property

While the IHT tax rebate will be welcomed by many families, it should be remembered it is not issued automatically. Families will have to “proactively” reclaim what they’re owed.

Sean McCann, a Chartered Financial Planner at NFU Mutual, said: “With house prices starting to dip, it’s important families are aware of this ability to reclaim Inheritance Tax that could save them thousands of pounds.

“Inheritance Tax is assessed on the value of a person’s estate on the date of death and the tax must normally be paid within six months. But if property is sold within four years of death for a lower price, the overpaid Inheritance Tax can be reclaimed.

“The number of these reclaims dipped last year due to the buoyant housing market, but are likely to increase if house prices continue to fall. With Inheritance Tax allowances frozen for the next five years, more and more families are being caught in the net. It’s important to take advice to ensure your family doesn’t pay more tax than they need to.”

While IHT reclaims for property values topped over 3,000 last year, this was a drop of 26 percent compared to the year before, suggesting many families may be unaware of this option.

DON’T MISS:

Britons eligible for extra £270 payment on top of Carer’s Allowance [INSIGHT]

Link

Inheritance Tax: Can you use the same will laws Prince Philip used? [EXPERT]

Link

Families face ‘large legal costs’ & ‘unexpected’ Inheritance Tax bills [WARNING]

IHT reclaims on loss of shares

Families can also reclaim overpaid Inheritance Tax on the value of qualifying shares and investments sold by the executors at a lower value in the 12 months after death. Another Freedom of Information request showed the number of people reclaiming Inheritance Tax on loss of shares increased last tax year to 2,240.

Mr McCann continued: “These figures show more people are becoming aware that they can reclaim overpaid Inheritance Tax when share prices fall.

“The increase in claims is due to the fall in share values we saw as a result of the coronavirus pandemic in the early part of 2020. Many families are unaware they can reclaim overpaid Inheritance Tax when share values fall.”

How to reclaim Inheritance Tax

Families can submit an IHT35 form to reclaim on loss of shares and an IHT38 form to reclaim on loss of land and property. Both of these forms can be found on the Government’s website and they must be submitted to HMRC.

However, NFU Mutual warned “there are a number of traps to look out for” when making these requests.

© EXPRESS House prices

The sale of the shares or property must be made by the “appropriate person” who is normally the executor. If the shares or property have been passed to members of the family who then sell at a loss they cannot reclaim.

Additionally, all the shares sold by the executor are aggregated, so if some have gone up in value this will reduce the amount of IHT that can be reclaimed.

Fortunately, NFU Mutual explained there is “one way around this”. Where applicable, the investments that have gone up in value can be passed on to beneficiaries, while only those that have fallen in value can be sold.

This would maximize the amount of money reclaimed from the Government.

Is it possible to reduce Inheritance Tax bills?

It is possible to reduce how much IHT is paid but this is a complicated area which usually requires specialist guidance and advice.

However, Money Helper, the public advisory service, explains families can reduce their IHT bills by:

  • Leaving a legacy to charity
  • Putting your assets into a trust for heirs
  • Leaving your estate to a spouse or civil partner
  • Paying into a pension instead of a savings account
  • Regularly giving away up to £3,000 a year in gifts

More families than ever will likely want to utilise these options as IHT becomes increasingly important for the Government. Between April and August, the state collected £2.7billion in Inheritance Tax, an increase of £700million when compared to the same period last year.

Internet Explorer Channel Network
News Related

OTHER NEWS

Wie die Kohäsionsmilliarde zum Streitfall wurde

Die Schweiz verhandelt mit der EU, wie die Kohäsionsmilliarde ausgezahlt werden soll. Worum es geht – und warum das Geschäft so aufgeladen ist: Erklärungen im Podcast «Apropos». © Foto: Keystone ... Read more »

Asian shares mostly higher, tracking Wall Street rally

1 / 5Hong Kong Financial MarketsA woman wearing a face mask walks past a bank’s electronic board showing the Hong Kong share index in Hong Kong, Tuesday, Oct. 26, 2021. ... Read more »

Lubang Island will be on lockdown amid spike in COVID-19 cases —mayor

— Lubang Island in Occidental Mindoro will be on lockdown starting Wednesday, October 27, amid the increase in COVID-19 cases in the area, according to Mayor Michael Orayani on Tuesday. ... Read more »

Third dose, booster COVID-19 vaccinations may spill over into 2022 —DOH

DOH Building The inoculation of senior citizens and healthcare workers with third doses and booster shots may spill over into 2022, the Department of Health (DOH) said Tuesday. When asked ... Read more »

Abu Dhabi F1: Amber Lounge after-race party to return to Yas Marina Circuit

© Amber Lounge Amber Lounge will return to the Abu Dhabi Formula One event. Photo: Amber Lounge One of Formula One’s popular after-parties will return to Abu Dhabi’s Yas Marina ... Read more »

34 more COVID-19 cases bring PNP total infections to 41,675

covid-19 thumbs The Philippine National Police (PNP) recorded an additional 34 cases of COVID-19 among its personnel, bringing the total number of infections to 41,675 as of Tuesday. In an ... Read more »

Dubai cruise season restarts with 500,000 visitors expected

© Provided by The National Dubai, the region’s cruise hub, rolled out a grand welcome to the 2,000 passengers and crew on board ‘Mein Schiff 6’. Photo: Dubai Media Office ... Read more »

The photo every parent should see: How a two-year-old boy was left covered in blood and in tears after being swooped by an aggressive magpie during a walk with his family

Mother recalled how son was attacked by angry magpie on a park footpathAshleigh Ferguson said son Jordan attacked near Maryborough, QueenslandShocked mother shared photo of her son bleeding from a wound on his head  Read more »

17.2°C: New Delhi wakes up to a chillier morning on Tuesday

© Provided by Hindustan Times A view of New Delhi’s skyline at Connaught Place. The Capital woke up to a chillier morning on Tuesday. (Sonu Mehta/HT FILE PHOTO) New Delhi ... Read more »

Real Housewives of Atlanta announces finalized cast list for upcoming season after stars Porsha Williams and Cynthia Bailey exit

The Real Housewives of Atlanta announced its finalized cast list for the upcoming season of the program.   Kandi Burruss will return for the 12th time while Kenya Moore will come ... Read more »

Man stages his own death for Rs 37.5 crore insurance claim, uses cobra as ‘murder weapon'

© Provided by DNA In a bizarre incident in Maharashtra’s Ahmednagar, a man tried to stage his own death using a cobra. The 54-year-old man tried to use a cobra ... Read more »

Karnataka opposes PIL for deporting Rohingyas

© Provided by The Times of India NEW DELHI/BENGALURU: The Karnataka BJP government has opposed a PIL filed by BJP leader Ashwini Kumar Upadhyay that seeks to detain and deport ... Read more »

'Unbelievable Experience': Paramilitary, Military Personnel Recount Breaking Bread With Amit Shah in Pulwama

© Provided by News18 ‘Unbelievable Experience’: Paramilitary, Military Personnel Recount Breaking Bread With Amit Shah in Pulwama “He is from Kashi,” quipped a beaming Home Minister Amit Shah as he ... Read more »

Mumbai's Water Supply To Be Badly Affected As BMC Conducts Repairs; Here Are The Areas That May Face Water Cuts

© Provided by News18 Mumbai’s Water Supply To Be Badly Affected As BMC Conducts Repairs; Here Are The Areas That May Face Water Cuts As the Brihanmumbai Municipal Corporation (BMC) conducts ... Read more »

Eye on UP elections, PM targets SP with graft jibe

© Provided by The Times of India LUCKNOW: PM Modi on Monday renewed his attack on Samajwadi Party, clearly identifying it as BJP’s main opponent, playing on the party’s symbol, ... Read more »

Karnataka HC issues notice to state government on plea challenging survey of churches

Karnataka HC issues notice to state government on plea challenging survey of churches The Karnataka High Court has issued a notice to the state government in response to a Public ... Read more »

NBA alum Iman Shumpert gets perfect 40 on Dancing with the Stars (Video)

Longtime NBA veteran Iman Shumpert is a contestant on the 30th season of Dancing with the Stars but, he’s not just there, he’s an absolute revelation on the dance floor.  ... Read more »

China to investigate energy index providers in bid to tame coal prices

FILE PHOTO: Workers unload coal at a storage site along a railway station in Hefei, By Shivani Singh and Min Zhang BEIJING (Reuters) -China said on Monday it will investigate ... Read more »

DJ trio Swedish House Mafia release new song

© The Manila Times Axwell, Steve Angello, and Sebastian Ingrosso of Swedish House Mafia AP PHOTO Axwell, Steve Angello, and Sebastian Ingrosso of Swedish House Mafia AP PHOTO NASHVILLE, Tenn.: ... Read more »

How to change the camera angle in NASCAR 21: Ignition

© Provided by GamePur NASCAR 21: Ignition offers a number of different camera angles for players. Want to see the dashboard? You can do that. Need to see a overview ... Read more »

Record rainfall as storm douses drought-stricken California

1 / 15California StormsThe North Fork of the Kaweah River, which flows from Sequoia National Park, is seen swollen with frothy, black water, Monday, Oct. 25, 2021, in Three Rivers, ... Read more »

Saints capitalize on Seahawks' mistakes for 13-10 win

© Provided by Associated Press New Orleans Saints’ Brian Johnson (6) kicks a 33-yard file goal against the Seattle Seahawks late in the second half of an NFL football game, ... Read more »

Law enforcement seeks illegal gun use tracking

Oct. 26—HIGH POINT — Law enforcement agencies from the greater High Point area are working with federal authorities to put information on guns used in local crimes into a national ... Read more »

Katy Perry covers The Beatles for Gap's holiday campaign

© Provided by Cover Media Katy Perry Katy Perry covers The Beatles’ All You Need is Love for Gap’s 2021 holiday campaign. In the lead-up to Christmas, the pop superstar ... Read more »

2 killed, police officer among 5 injured in Idaho mall shooting

Two people were killed and five others were injured, including a police officer, in a shooting at a mall Monday afternoon in Boise, Idaho, police said. A suspect was critically ... Read more »

Australia unveils 2050 net zero target ahead of Glasgow summit

© Provided by Al Jazeera Protesters in Australia have been demanding action on climate change [File: Sonali Paul/Reuters] Australia will commit to a target of net zero carbon emissions by ... Read more »

New party buzz becomes louder, former Punjab CM Amarinder Singh to address press tomorrow

Amid the announcement of floating a new political party, former Punjab chief minister Captain Amarinder Singh will be addressing a press conference in Chandigarh on October 27, Media Advisor of ... Read more »

Three-time drunk driver gets 5 years

Oct. 26—LIMA — A Lima man who drive under the influence of alcohol and caused a traffic accident that claimed the life of a Wapakoneta woman in 2020 was sentenced ... Read more »

Lima man sentenced in 2020 shooting

Oct. 26—LIMA — Lima resident Cameron Rogers, who pleaded guilty last month to felonious assault in the 2020 shooting of Lamonda Pryor, was sentenced Monday to seven years in prison. ... Read more »

Non-regular workers rise to over 38% of total amid pandemic

This photo shows the inside of a distribution center in Songpa, southern Seoul. (Yonhap)The proportion of temporary workers in South Korea rose to over 38 percent of all salaried workers ... Read more »

Dundee United superfan builds incredible Tannadice Park replica with working floodlights

A Dundee United superfan has spent nine months building an incredible replica of the team’s stadium at his home in the American city of Seattle. Lifelong fan Wayne Brown, 40, ... Read more »

Cristiano Ronaldo could be one step closer to extending unwanted record at Manchester United

Cristiano Ronaldo is unquestionably one of the most talented, revered, decorated footballers to ever grace our beautiful game. Since 2008, only one player has managed to breach the duopoly created ... Read more »

Manchester United humiliation worsens as Cristiano Ronaldo sends 'blame' message after Liverpool win

Reds overtake United by spending wisely For Liverpool much of the 1990s and 2000s were spent looking up in the Premier League table at Manchester United, thinking of ways they ... Read more »

Which wheels are compatible with NASCAR 21: Ignition?

In NASCAR 21: Ignition, players will have the option to drive either with a controller, or a wheel. However, Motorsports Games has stated that not every wheel will be supported ... Read more »

Xi's not there? COP26 hopes dim on Chinese leader's likely absence

By David Stanway © Reuters/CARLOS GARCIA RAWLINS FILE PHOTO: Meeting commemorating 110th anniversary of Xinhai Revolution in Beijing SHANGHAI (Reuters) – The leaders of most of the world’s biggest greenhouse ... Read more »

COVID-19 engulfs Singapore's Mental Health Institute

The Institute of Mental Health Singapore at Buangkok View. Photo: Google A new outbreak has emerged at a facility caring for Singapore’s psychiatric needs as the city struggles to contain ... Read more »

CVC's Ahmedabad bid augurs well for BCCI and the IPL

© Provided by The Times of India MUMBAI: A private equity and investment advisory firm with market commitments in excess of US$110 billion across Europe and Asian equity, credit and ... Read more »

AIBA Men's World Championships: Rohit Mor wins, Asian champion Sanjeet gets bye

AIBA Men’s World Championships: Rohit Mor wins Rohit Mor defeated Olympian Jean Caicedo 5-0 in the 57kg opening round match to give India a winning start at the 2021 AIBA ... Read more »

Christopher Steele: Confessions of a former British spy

In his first major interview with a British broadcaster, the 57-year-old – who wrote the infamous dossier on Donald Trump – warned of growing Russian hostility. On the Sky News ... Read more »

Facebook made $9.2 billion in quarterly profit, more than analysts expected, even amid its whistleblower saga

© Matt McClain-Pool/Getty Images/Andrew Harnik/AP Facebook CEO Mark Zuckerberg (left) and former Facebook employee Frances Haugen. Matt McClain-Pool/Getty Images/Andrew Harnik/AP Facebook earned $9.2 billion in the third quarter, up from ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic