Inheritance tax (IHT) receipts collected in the current financial year have reached £5bn, with HM Revenue and Customs (HMRC) set to break collection records for the fourth consecutive year.

The amount collected between April and October 2024 is £500m higher than it was in the same period last year.

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 reached 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.

Group communications director at Just Group, Stephen Lowe, said: "IHT has provided a steady stream of income for the Treasury and this year is on track to grow to new record levels for a fourth year in a row. These increases start to look modest compared to the forecast inheritance tax takes following the reforms announced in the Budget.

"With the thresholds frozen for another two years, any growth in property prices or other assets will drag more estates over the threshold, as reflected in the number of deaths subject to IHT now forecast to reach nearly 10% by the end of the decade.

"These changes underscore the importance of people staying on top of the value of their estate and keeping an eye on the future. As a starting point, we encourage people to make sure they have an up-to-date valuation of their estate to help them understand if they are likely to incur IHT."

---