HM Revenue & Customs (HMRC) could be in store for a “record-breaking year” of inheritance tax (IHT) receipts as their take soared once again in November.
Total receipts for April 2022 to November 2022 are £4.8 billion, which is £0.6 billion higher than in the same period a year earlier. This also represents a month-on-month increase of c. £700 million compared with the c. £600 million increase seen in October.
“The latest IHT receipts shows we are on for a record-breaking year,” said Andrew Tully, technical director at Canada Life:
“With thresholds frozen until at least April 2028, more estates will be coming in from the cold and will likely be caught in this widening tax net, and this is despite predicted house price falls in 2023.”
Indeed, according to Office for Budget Responsibility projections, the freeze will lead to an increase in receipts from £6.1 billion 2021/22 to £7.8 billion in 2027/28 – an increase of 28%. Tully added:
“Advisers will be helping by discussing estate planning solutions with clients and their wider families. Engaging early with good planning can help to reduce or mitigate IHT so it’s essential anyone who considers IHT to be an issue should be seeking expert advice now.”
Note that HMRC said the spike in receipts in November 2022 is due to a small number of higher-value payments than usual.