The latest Inheritance Tax (IHT) data for February reveals that with one month remaining in the 2022-23 financial year, IHT receipts have already surpassed all previous records.
IHT receipts for the month totalled £531m, bringing the tax take for 2022-23 to £6.4bn, exceeding the £6.1bn received by the Treasury throughout the entire 2021-22 financial year by £353m.
Last week, the Office for Budget Responsibility (OBR) revised its future IHT projections, estimating that between 2022-23 and 2027-28, the Treasury will receive nearly £3bn more than previously forecast at the November statement.
The total IHT tax take by 2027-2028 is now projected to be £45.0bn, compared to the previous estimate of £42.1bn.
By 2027-28, it is estimated that 6.7% of deaths, or approximately 47,000, will trigger an inheritance tax charge, up from an estimated 4.1% in 2020-21.
Stephen Lowe, group communications director at retirement specialist Just Group, commented on the growing importance of IHT for the Government: “The Chancellor is benefitting from the pincer movement of recent rises in property prices and frozen thresholds. Inheritance Tax is an increasingly valuable source of income for the Government which has raked in a record sum even with one month of this tax year’s receipts yet to be collected.”
Lowe also highlighted the need for individuals to regularly assess the value of their estates, given the rising number of estates likely to be liable for inheritance tax.
He suggested obtaining up-to-date property valuations and seeking professional, regulated advice to calculate potential tax liabilities and explore options for managing tax bills.
