The latest data from HM Revenue & Customs (HMRC) has revealed that inheritance tax (IHT) receipts remained sky-high in August.
The take of roughly half a billion pounds in the period July – August alone brings the overall IHT receipts for the tax year up to £2.9 billion.
This is £0.3 billion higher than in the same period a year earlier, according to HMRC.
Much of the boost in IHT receipts stems from the increased value of the deceased’s estates, largely due to relentless growth in the value of residential property in the UK. Andrew Tully, technical director at Canada Life, explained:
“After a spike earlier in the year, [IHT receipts] appear to be plotting a similar course to last year. The tax has now delivered almost £3bn to the taxman since April, £0.3 billion higher than a year earlier and the frozen thresholds mean it has already doubled its tax take from IHT over the last 10 years.
Residential property makes up the largest share of most estates and persistently rising house prices across the country will drag more and more unsuspecting people into the tax.
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 legacy from the pandemic may mean more people are open to discussing estate planning with family. Good planning can help to reduce or mitigate IHT so it’s essential to get expert financial advice for tax efficient ways to pass wealth onto loved ones.”
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