Inheritance tax set to bite harder as number of UK millionaires rockets

Analysis of HM Revenue & Customs’ latest UK Personal Wealth Statistics by financial services company, NFU Mutual, shows a 27% rise in the number of millionaires between 2008-2010 and 2011-2013 to just over 409,000.

Based on the rate of increase, the UK is scheduled to have almost half a million (495,000) millionaires this year and almost 600,000 (585,000) by 2020. However, this may lead to many more people paying inheritance tax – especially as the nil rate band will remain frozen at £325,000 until 2021.

Commenting on the number of UK millionaires, Sean McCann, chartered financial planner at NFU Mutual, said: “More millionaires means more inheritance tax for the Treasury. These figures show that the taxman is set to take an ever greater slice of people’s estates over the next few years as house prices and share prices have boosted the wealth of the nation.

“It is becoming ever more important that people plan ahead for inheritance tax bills. There are plenty of simple ways to maximise the amount that will go to those who are left behind. 

“The tax free allowance of £325,000 has been frozen since 2009 and is set to stay the same until 2021. The new tax free allowance that can be used to save inheritance tax on the family home is being introduced from April 2017, it will rise from £100,000 to £175,000 in 2020. By which time it will be possible for a married couple to leave up to £1m free of IHT.”