Inheritance Tax (IHT) receipts in the UK have hit £1.2bn in the first two months of the 2023/24 financial year, marking a 13% rise from the £1.1bn raised during the same period last year, according to HMRC’s second update for the financial year.
The record-breaking collection follows a robust 2022/23 financial year, where a staggering £7.1bn was raised in IHT.
The latest data indicates a trend towards exceeding the previous year’s record-breaking IHT receipts.
The Office for Budget Responsibility (OBR) has forecasted that IHT will raise £7.2bn in the current financial year and as much as £8.4bn by 2027/28, as more estates fall under the frozen thresholds.
Stephen Lowe, group communications director at retirement specialist Just Group, said: “Inheritance Tax receipts are already ahead of what the Treasury collected at this point last year.”
According to Lowe, the persistent freezing of the current thresholds until 2028, coupled with property price surges during the pandemic, will make IHT a consistent source of revenue for the Chancellor of the Exchequer. However, he posed the question, “but at what political cost?”
Lowe suggested that political parties, with the pressure of a looming General Election and households struggling financially, might consider revising IHT policies to gain electoral favour.
He warned: “Rising inheritance tax receipts should act as a warning for people to remember to assess the entire value of their estate, including an up-to-date valuation of their property.”
