Inheritance tax receipts got here in at £3.7bn between April and August, up some £200m on the identical interval a yr in the past, the newest HMRC information reveals.
Higher takings since March 2022 are on account of a mix of “increased volumes of wealth transfers following latest liable deaths”, and authorities selections since March 2021 to freeze the levy’s tax thresholds at 2020 to 2021 ranges till 2029 to 2030, the tax physique notes.
Inheritance tax impacts estates price over £325,000, that are liable to the 40% levy, with extra estates being pulled into the bracket yearly on account of frozen thresholds and rising property costs.
However, simply 4.6% of deaths resulted on this levy being paid between 2022 and 2023, in keeping with HMRC information.
Last month, experiences emerged that Chancellor Rachel Reeves is contemplating a nationwide property tax to interchange stamp responsibility and an area properties tax that might be phased in to interchange the council tax on the 26 November Budget.
Quilter tax and monetary planning professional Shaun Moore says: “Frozen thresholds, excessive property values, and the scheduled inclusion of pensions in 2027 imply inheritance tax is about to develop additional, making it a tempting, if controversial, supply of extra income.”
Key Advice & Air chief government Will Hale provides: “Today’s numbers are an extra reminder of the cash that’s leaking from estates and the significance of fine monetary planning in an effort to defend wealth for the following technology.
“While a part of the rationale for the rise in inheritance tax receipts is all the way down to latest rises in asset values, which is a constructive for purchasers, it ought to be remembered that the federal government has constantly chosen to take care of tax-free thresholds at their 2020 to 2021 ranges.
“Judging by the ‘kite flying’ that’s going down upfront of the November Budget, there should be a excessive probability that not solely will these tax thresholds be left untouched but additionally additional measures carried out to spice up public funds by way of rising the tax take upon demise.”
