IHT receipts increase by 11% year-on-year

The amount of inheritance tax (IHT) receipts collected by HM Revenue and Customs reached £5.7bn between April and November, an 11% increase on the same period in 2023/24.

The Government's tax authority revealed that this puts the current financial year on course to be the fourth consecutive year of record IHT collections for the Treasury.

The Office for Budget Responsibility (OBR) has predicted that IHT receipts will continue to rise and has forecast that the total tax take will reach £9.7bn a year by 2028/29, having hit a record £7.5bn in 2023/24.

HMRC said that higher receipts since March 2022 are from a combination of volumes of wealth transfers following IHT-liable deaths, recent rises in asset values and the previous Government’s decision to maintain the IHT tax free thresholds until 2027/28.

The latest figures come after the Chancellor, Rachel Reeves, froze the IHT threshold by a further two years, taking the threshold through to 2030.

This applies to the nil-rate band at £325,000 and residence nil-rate band at £175,000, which were previously frozen by the Conservatives until 2028.

Head of UK technical services at Utmost Wealth Solutions, Simon Martin, said: "The IHT snowball continues to gather growing momentum as the extended freeze in IHT thresholds and rising property prices looks set to continue delivering record tax hauls to the Treasury.

"Changes to the IHT and non-dom regime announced at the Autumn Budget will spread the net further, leading to more and more estates being caught up in the tax as the Treasury clamps down on certain areas. While IHT is often perceived as one of the more unpopular taxes, there are steps that can be taken to mitigate its impact, and this Budget will no doubt create the stimulus for people to urgently assess their circumstances.

"We expect to see a spike in demand for professional advice around IHT as individuals reconsider their plans, which could see strategies shift to lifetime gifting earlier and more often to individuals or trusts and perhaps spending their pension pots. There could also be increased interest in insurance policies and death benefits that can protect individuals against these rising IHT liabilities."



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