HMRC has now taken £5.3bn in inheritance tax (IHT) since April last year, new government data has revealed.

The latest figures cover the period from April up to the end of December, and show that IHT receipts are an estimated £700m higher than in the same months in 2021.

HMRC stated that the 2022 total includes higher levels of receipts in June and November, which could be attributed to “a small number of higher-value payments than usual”.

The government’s current IHT intake is continuing an upward trend in comparison to previous years, largely as a result of sustained house price increases, particularly in London and the South East, pushing more estates over the threshold.

In the Chancellor’s Autumn Statement in November, Jeremy Hunt announced that the IHT threshold of £325,000 will remain frozen until April 2028.

This threshold, or the nil rate band, has been £325,000 per single person since April 2009, while there is also an additional transferrable main residence nil rate band of £175,000 available when passing the family home down to children or other direct descendants. The standard IHT rate is 40% and is only charged on the part of an estate above the threshold.

Commenting on the latest figures, group communications director at Just Group, Stephen Lowe, said: “The combination of the freeze on the nil rate band and rising property prices continues to funnel more IHT into government coffers, especially in regions where house prices are far higher than the rest of the country.

“Substantially more estates pay IHT in London and the South East and a recent Just Group FOI found that the property accounted for 50% of the wealth in London estates paying IHT compared to 32% for the rest of the UK.

“Further significant house price rises through the pandemic are likely to have tipped many more estates over the IHT threshold, perhaps without the homeowners even realising.

“It is yet another reminder for people of the importance of regularly assessing the value of their estate which includes getting an up-to-date valuation of any owned property.”

Technical director at Canada Life, Andrew Tully, added: “The latest IHT receipts suggest we are on a trajectory for a record-breaking year, with the frozen thresholds catching more estates in a wider tax take. IHT is no longer an issue for the wealthy only, but with effective financial planning much can be done to minimise the impact of IHT on estates, including the use of trusts and gifting.

“Financial advisers will be helping clients navigate the complexities of IHT by discussing estate planning solutions with clients and their wider families. By engaging early, good planning can help to reduce or mitigate IHT so it’s essential anyone who thinks IHT may be an issue should seek expert advice.”

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