HMRC has now taken in £6.1bn from inheritance tax (IHT) receipts since April 2021, new figures have confirmed.

This total, for the period up until the end of March 2022, is £700m higher than in the same period a year earlier.

Last month, HMRC reported that IHT receipts totalled £5.5bn for the period from the start of the current tax year up to the end of February – meaning a further £600m in IHT was raked in by the government during March.

This takes the total IHT receipts received by HMRC in the first three months of the year to £1.5bn, after the latest figures follow the reported £400m in IHT receipts during January, and £500m in February.

“Tax on death is not just for the very wealthy,” commented CEO and founder of Wealth Club, Alex Davies.

“Rising house prices, especially in the southeast and London, have pushed many homeowners over the IHT threshold, not helped by the fact that both the nil rate band and resident nil rate band (RNRB) have been frozen until at least April 2026. The revenue generated from IHT plays an important part in the government’s spending programme.

“The good news is that there are a number of ways that people can legitimately reduce, or even potentially wipe out an estate’s IHT liability. This means that more can be passed on to loved ones without the government taking a sizeable cut and without losing control of your assets in your lifetime.”

Chartered financial planner at Quilter, Rosie Hooper, added: “With thresholds frozen, the increase in IHT revenue is viewed as a stealth tax, as more and more people are dragged into the IHT net following the sale of their homes.

“This tax year, you can pass on £175,000 of your property tax-free, which is effectively doubled to £350,000 when combined with the allowance of your spouse or civil partner. That’s layered on top of your IHT allowance – or nil rate band – of £325,000, meaning it is possible to pass on £1m inheritance free as a couple.

“However, the RNRB only works for those with direct descendants to inherit the family home, while the UK’s six million cohabitees are less fortunate and cannot claim the combined allowances.

“There are other ways to reduce your IHT exposure, such as gifting to family members. Each tax year you can give away up to £3,000 worth of gifts with your annual exemption, so as a couple you could gift £6,000 a year. In addition, there is no limit on excess income – above expenditure – that can be gifted. Unfortunately, gifting allowances have failed to keep up with inflation, and the currently soaring inflation rates will do little to help matters in terms of IHT bills.”

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