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IHT receipts continue to rise

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The Government collected more than £4.5billion in Inheritance Tax (IHT) during the last financial year.

The revenue raised in 2015/16 was a 17 per cent increase on the 12 months previously and a staggering 91 per cent higher than the sum which flowed into Treasury coffers in 2009/10.

Experts have said that receipts have rocketed as the £325,000 threshold has remained at the same level, despite rising house prices meaning that more and more people are finding themselves liable to pay the levy.

It has been estimated that had the so-called “death duties” risen in line with inflation then the nil-rate-band would now have extended to £391,000.

While a more generous regime is set to be introduced over the course of this Parliament, the Government has faced a degree of criticism for moving too slowly in implementing changes.

Ministers have hit back, arguing that they’ve taken decisive action to address long-standing failings in the IHT system.

An HM Treasury spokesman said: “The Government wants families to be able to pass on their home to their children or grandchildren.

“That’s why we’re reforming the rules from next year to bring down the number of families paying Inheritance Tax, with nearly 30,000 estates taken out of paying Inheritance Tax in 2020-21 alone.

“Under the new system families will have a new £175,000 Inheritance Tax allowance for their home on top of the existing £325,000 threshold – allowing them to pass £1million on to their children completely free.”