New data from HM Revenue & Customs (HMRC) has revealed inheritance tax (IHT) receipts are £0.9 billion higher than in the same period a year earlier.
In total, the take from IHT for the financial year until now sits at £6.4 billion, up from £5.5 billion this time last year.
Laura Tommis, Business and Relationship Development Manager at ZEDRA, pointed out that receipts are now above what was received overall during the entire financial year of 2021/22, continuing:
“It is not surprising that many families who have not considered themselves wealthy or thought their estates could be within the remit of IHT have been dragged into the statistics.
Whilst the housing market, which has historically contributed to increase in IHT receipts, has slowed down recently, stagnant tax thresholds and inflation have resulted in more estates now being liable for IHT than before. With both the Nil Rate Band and Residence Nil Rate Band allowances frozen until 2027/28, it is inevitable that this trend will only continue.”
Tommis went on to point out the ways in which IHT liability can be reduced:
“However, there are ways in which families can look to mitigate their IHT liability, such as lifetime gifting into trusts, which can offer powerful tools when used correctly and appropriately over time. A suitably drafted Will can also ensure that families can take advantage of available tax allowances and reliefs, such as the Residence Nil Rate Band, where available. Professional advice should remain central to any family’s IHT planning goals, both from the outset but also to keep matters under regular review to capture any changes in personal circumstances as well as within the tax and regulatory landscape.”