HMRC reports rise in IHT receipts

Receipts for inheritance tax (IHT) between April and September this year totalled £3.1bn, new HMRC figures have revealed.

The total is £0.7bn higher than in the same period a year earlier.

Higher receipts from March to August 2021, as well as in October and November 2020, are expected to be due to higher volumes of wealth transfers that took place during the COVID-19 pandemic, though HMRC said it cannot verify this until full administrative data becomes available.

Lower receipts were recorded in April and May 2020 due to a temporary issue where HMRC was unable to accept cheques for payment of IHT due to COVID-19, which was resolved, hence the peak in June 2020 receipts

HMRC revealed that total tax receipts for the period between April and September were £334.3bn, which is a figure £91.6bn higher than in the same period a year earlier.

Commenting on the figures, Canada Life technical director, Andrew Tully, said: “Higher volumes of wealth transfers during the pandemic have trigged IHT charges on estates. With IHT tax receipts on the rise, now is the time to put in place effective estate planning.

“We watch the upcoming Budget with great interest to see if the Chancellor makes any further changes, but he has little wiggle room around IHT as the tax thresholds are currently frozen.”

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