HM Revenue and Customs (HMRC) has disclosed that inheritance tax receipts from April to December 2023 amounted to £5.7bn, marking a £0.4bn increase from the same period in the previous year.
This 7.5% rise suggests that the Treasury is on track to collect a record sum of approximately £7.6bn from inheritance tax (IHT) in the 2023/24 tax year.
This follows a significant climb to an all-time high of £7.1bn in the 2022/23 tax year, which itself was a £1bn increase from 2021/22.
Stephen Lowe, group communications director at retirement specialist Just Group, commented on the trend: “We are now three-quarters of the way through the 2023-24 Financial Year and it is evident that the Chancellor can once again bank on record-busting IHT receipts for a third successive year.
“Freezing the thresholds has dragged more households into paying Inheritance Tax especially when combined with the property price rises of the last five years or so.”
Lowe further noted that at the current rate of collection, IHT is expected to raise around £7.6bn for the Treasury this financial year, exceeding both the Office for Budget Responsibility’s forecast of £7.2bn and the previous year’s record.
He added: “It’s a useful source of revenue for the Government but we may see the Chancellor prioritise political expediency in the coming Spring Budget as we rapidly approach the next General Election.”
Highlighting the impact on households, Lowe stated: “Only a small proportion of households are impacted by IHT, but the tax bites deep on those estates affected.
“Our research suggests there is a low level of understanding around the Inheritance Tax rules and thresholds, with the majority unaware of how much their estate must be worth to incur a tax charge.”
