Latest HMRC figures show that IHT receipts for April 2021 to March 2022 are £6.1 billion, which is £0.7 billion higher than in the same period a year earlier.
Commenting on the overall annual figures HMRC has stated that higher receipts in October 2020, November 2020, and March to August 2021 are 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, and, it says, this also explains the high receipts observed in March 2022.
Andrew Tully, technical director at Canada Life commented:
“Figures show IHT receipts between April 2021 and March 2022 were up by £700m to £6.1bn, a 13% increase compared to the previous year. This will partly be driven by the ongoing increase in house prices, as residential property makes up the largest share of most estates. There have also been a higher volume of wealth transfers due to Covid – partly due to more deaths in the elderly population, but also as some people make outright gifts to help family during this difficult period.
Both the nil rate band and residence nil rate band are frozen until at least April 2026 so we can expect to see IHT receipts continue to rise.
The Covid pandemic may mean more people are open to discussing estate planning with family. It’s crucial to get expert financial advice as there are tax efficient ways to pass wealth onto loved ones.”
Julia Rosenbloom, tax partner at Smith & Williamson, part of wealth management and professional services group Tilney Smith & Williamson, commented:
“The latest reported year-on-year rise in IHT collections will be welcomed by the Treasury that needs every pound it can get at the moment to pay for the government’s ambitious spending commitments against a backdrop of ongoing global uncertainty.”