The Government’s intake from inheritance tax (IHT) has climbed to £6.3bn in the 2023/24 tax year, new HMRC figures have shown.

This total, for the period since April last year to the end of January 2024, is around £400m more than the total figure for IHT receipts in the same period a year earlier.

In 2022/23, the Government’s full-year intake from IHT totalled a record £7.1bn for the Treasury, which now looks set to be beaten once again after Office for Budget Responsibility (OBR) forecasts have indicated the tax could raise over £7.5bn for Treasury coffers this time around.

With the Budget also on the horizon in March and Chancellor Jeremy Hunt potentially looking to cut taxes before a General Election later in 2024, rumours about potential reforms or plans to scrap IHT altogether have continued to persist among economic experts.

Group communications director at Just Group, Stephen Lowe, said: “With the Spring Statement looming, the bumper tax-take will no doubt set tongues wagging as to whether the Chancellor will look at cutting IHT.

“We would encourage people to assess the entire value of their estate, including an up-to-date valuation of their property, and familiarise themselves with the IHT thresholds.”

More estates have been dragged into paying IHT because of the nil rate band, also known as the IHT threshold, remaining frozen at £325,000 until at least April 2028. This is the amount up to which an estate has no IHT to pay.

Calculations by Wealth Club have suggested that for those who must pay IHT, the average bill could increase to £238,000 in the 2023/24 tax year, with over 30,000 families having to hand over part of their inheritance to HMRC.

This represents an 11.2% increase from the £214,000 average paid just three years ago, and a 14.2% rise in the number of estates paying the tax.

Investment manager at Wealth Club, Nicholas Hyett, added: “The Government seems to be rowing back on potential tax cuts at the March Budget. And with IHT an ever-growing source of revenue, you can see why the Chancellor might find it difficult to cut this most unpopular of taxes. Any shortfall would mean higher tax or lower spending elsewhere.”

---