News

13/06/19
The richest families in Britain are benefitting from huge tax breaks when they inherit wealth, a recent report has found.

Tax Justice UK has uncovered evidence that shows how many people are taking advantage of tax reliefs intended to provide support for small businesses.

For instance, many rich people are purchasing agricultural land to leave to their relatives so their beneficiaries do not have to pay huge amounts of tax on the assets after their death.

The organisation’s latest research found 234 families with over £1 million in business assets benefitted from £458 million in tax breaks during 2015-16, representing nearly 80 per cent of the total business tax relief for that 12-month period.

In addition to this, 261 families with agricultural property worth more than £1 million enjoyed £208 million in tax relief during the same year, which was nearly two-thirds of the total inheritance breaks offered.

“Our report shows that a system of generous tax reliefs on the value of agricultural and business property is working to significantly reduce the inheritance tax bills of wealthy families. The total cost of these reliefs was £1 billion in 2018/19 alone, equivalent to the cost of employing 26,000 NHS nurses,” Tax Justice UK stated.

Alternative ways to reduce inheritance tax is to gift wealth over a period of seven years before death; give assets to charity; and make use of trusts, as well as the option to leave wealth through agricultural and business property.

Otherwise, inheritance tax of 40 per cent is owed on the estate of the deceased over the value of £325,000, unless the beneficiary is a spouse, a charity or a community amateur sports club.

For help understanding inheritance tax, get in touch with East Anglian lawyers today.