The removal of the UK residence nil rate band has been called for by an industry expert, as HMRC announced its latest statistics.
April's figures highlighted that tax receipts were down 12% from the previous month, but despite the drop they remain high generally - a point that Rachael Griffin tax and financial planning expert at Quilter, believes should bring about changes to the UK residence nil rate band.
Griffin, pictured left, said that generally inheritance tax take per month is still "hovering in the upper range" of where they've been in previous years, perhaps suggesting "we are at a new norm of near or over £500m per month rather than £300m - £400m", which had been the trend in the past number of years.
"HMRC coffers didn't benefit as much in April as tax receipts were down 12% from the previous month," she said. "However, they still note that April's receipts were unusually high and they are unsure of the case.
"This should raise a big question mark over the success of the residence nil rate band, which was supposed to bring IHT levels to where they were at in the 2014/15 tax year. While the threshold will steadily increase over the next number of years, current signs are not encouraging.
"You would have thought the last two years would have reduced slightly due to this being introduced, but the growth rates has continued, completely unchanged," she said.
Griffin believes that a number of factors are involved, including the fact that house prices might still be above the current residence nil rate band threshold or that people aren't leaving their houses to blood relatives, which is an out of date restriction required to benefit from the RNRB.
"The Office for Tax Simplification is currently preparing a second paper as part of the IHT review which should cover the rules governing the residence nil rate band and this offers an ideal opportunity to fix this overly complicated outdated allowance," Griffin added.
"One of the reasons this allowance isn't hitting the Treasury's balance sheet too heavily is because it is so restricted. For instance it omits the close to 6 million cohabiting couples. It is reassuring that the Treasury says all options are still on the table. There will be a price to pay for simplicity, but it's value will be exponential."
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