Government charge Inheritance Tax on half of all shares

Nearly half of all inherited shares are subject to Inheritance Tax (IHT), a new study has revealed.

The figures, published by HM Revenue & Customs (HMRC), show that the Government taxed some £5.8 billion worth of shares in 2016.

Inheritance Tax is charged at 40 per cent on anything above the £325,000 IHT threshold.

Commenting on the figures, Kealan Doyle, chief executive of Symvan Capital, said: “So much of the IHT paid out by those inheriting shares is unnecessary – there are simple steps to take that can lower or completely eliminate IHT liability.”

Investors have several options. Money invested into an Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) is not subject to IHT if the shares are held for more than two years.

You can invest up to £1 million per annum in an EIS, and reclaim 30 per cent of the cost of investments against income tax bills and not pay Capital Gains Tax (CGT) on investment after three years.

“The EIS and SEIS schemes are a win both for taxpayers and for small businesses. Individuals gain both a range of substantial tax advantages, and the opportunity to invest in high-quality, high-growth businesses,” said Mr Doyle.

“At the same time, small businesses get access to long-term investment that has been in much shorter supply since the credit crunch.”

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Nigel is the firm’s Managing Partner and joint Head of Litigation and Dispute Resolution at Mackrell Turner Garrett’s London office. He is widely experienced in complex litigation matters, and various forms of dispute resolution.
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