The Treasury has reported a significant leap in Inheritance Tax (IHT) revenue, with the first update for the financial year 2023/24 revealing a total of £597m collected in April alone.
The rising figures have followed a historic 2022/23 year, in which IHT collection peaked at a staggering £7.1bn, marking an ongoing trend of increasingly substantial tax revenues for the UK government. These profits saw a notable upswing from £5.3bn in 2020/21 and £6.1bn in 2021/22.
The Office for Budget Responsibility’s (OBR) latest projections predict that IHT may further raise £7.2bn this financial year, potentially increasing to as much as £8.4bn by 2027/28 due to the sustained freezing of thresholds.
Stephen Lowe, group communications director at retirement specialist Just Group, highlighted the dramatic 14% and 17% increases in IHT receipts over the past two years. He said: “Inheritance Tax receipts are growing by nearly £1bn every 12 months. This year has already got off to a hot start with receipts in April up £90m compared to the same month last year.”
Lowe noted that the inflated tax hauls are likely propelled by the freeze on thresholds and surging property prices, particularly amid the pandemic. He added: “With the existing thresholds due to remain in place until 2027/28, The Treasury looks set to continue banking healthy inheritance tax receipts.”
Reflecting on these figures, Lowe concluded: “The figures should act as a warning for people to remember to assess the value of their estates, including an up-to-date valuation of their property.
“Professional, regulated advice can also help people work out the total value of their estate, calculate how much tax they may be likely to owe and understand what options they have to manage that tax bill.”
