More Britons are becoming liable to pay inheritance tax (Image: GETTY)

Pressure to abolish inheritance tax is mounting, with greater than 50 Conservative MPs calling on Prime Minister Rishi Sunak to scrap the hated tax.

They have backed a marketing campaign from the Conservative Growth Group that claims the proportion of properties below menace from the tax has greater than doubled because the Conservative Party got here into workplace in 2010, as extra inheritors should promote their deceased beloved one’s properties to pay the tax.

Former Chancellor Nadhim Zahawi claimed that the levy is “morally wrong”. He wrote in The Telegraph: “Inheritance tax is that other spectre that haunts us alongside death.

“As well as being morally wrong to take someone’s assets on their death, it also creates all sorts of inefficient and damaging distortions in our personal finances and the wider economy.”

Rising costs for homes and different property means extra Britons are being hit by the levy. An heir has till six months has ended after the particular person’s demise to pay the tax, which will be for tens of 1000's of kilos.

Inheritance tax (IHT) is a 40 percent levy on any complete inherited property, above the worth of £325,000 from a single particular person, or above £650,000 from a pair who had been married or in a civil partnership.

‌‌READ MORE: Pension savers could get £9,000 a year income boost for retirement if they take action

More Britons are becoming liable to pay inheritance tax (Image: GETTY)

There is an extra residential nil price band if an individual is inheriting the deceased particular person’s main residence, of as much as £175,000 for a single particular person and as much as £350,000 for {couples}.

Ian Dyall, head of Estate Planning at wealth supervisor Evelyn Partners, warned that tax is hitting extra Britons on center incomes.

He mentioned: “As the £325,000 IHT threshold called the nil-rate band has been frozen since April 2009, many more estates – in most cases of modest size in real terms - are being drawn into liability.

“Beneficiaries not usually considered well-off are facing tax bills, and this can be especially problematic if a property comprises the majority of the estate, leaving few liquid assets to foot the bill.”

IHT receipts hit a file £7.1billion up to now monetary yr, which was 17 % greater than within the earlier yr.

More Britons are becoming liable to pay inheritance tax (Image: GETTY)

Britons face other tax increases this financial year because the tax-free allowance for capital positive aspects tax (CGT) has been slashed from £12,300 to £6,000. The CGT threshold is being lowered to £3,000 from subsequent April.

Mr Dyall mentioned: "The increasing tax burden from frozen and reduced income tax thresholds – as well as the shrinking capital gains tax allowance – will make many households feel squeezed in the coming years, particularly against the background of a cost of living crisis.

“As income tax is very difficult to seek protection against, families will naturally try to make sure that they reduce or minimise tax liabilities in other respects.“And one of these will be the transfer of wealth. Those who feel they have paid enough tax on their earnings or assets will naturally try to take advantage of any allowances and strategies available which mean that when they die their beneficiaries will not be landed with unnecessary tax bills.”

People can reduce their IHT liability in several ways, including making gifts to reduce the size of their estate.

A person can also invest their funds in pensions, which are not considered to be part of a person’s estate for IHT purposes.

More Britons are becoming liable to pay inheritance tax (Image: GETTY)

Mr Dyall spoke about some “lesser-known” ways people can reduce the tax bill their successors will face.

With regard to the additional residential nil band rate, this may apply even if the property was no longer possessed by the person when they died.

If a person owned their home after July 7, 2015 and sold it so they could downsize or move into a care home, their executors may be able to claim downsizing relief.

Mr Dyall said: “The assets that the relief is being claimed for do not have to be shown as directly accruing from the sale of the home, but you must leave sufficient money to children or grandchildren to cover the amount being claimed.

“And the property must have been your home at some point after July 7, 2015 and sold before you died.”

He additionally pointed to outlined contribution pensions as a great way for an individual to cut back their IHT legal responsibility.

Mr Dyall defined: “If you have used part of your pot to buy an annuity that will be counted as removed from the pension – just as any tax-free lump sum will be - although the annuity itself might have a death payout if you chose such a product.

“It is funds remaining in either a DC pension pot or in drawdown that could be useful in passing on wealth tax-efficiently.

“If you die before age 75, whoever inherits your savings pays no IHT and can also draw on the money with no income tax to pay.

“If you die after 75, your heirs still pay no IHT, but there will be income tax charges on withdrawals at their marginal rate.”

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