HM Revenue and Customs (HMRC) has revealed an additional £603m was raised in July from inheritance tax (IHT). The receipts from April to July 2023 amount to £2.6bn, a £0.2bn increase from the same period in the previous year.
Last year (2022/23) recorded £7.1bn from IHT, but this financial year (2023/24) looks set to beat that record, with the opening quarter alone raising £2.0bn.
The increase in revenue is attributed to gains in property prices and frozen thresholds, resulting in more households paying the tax. HMRC’s recent data shows that 27,000 estates paid IHT in the financial year 2020/21, a 17% increase compared to the prior year.
The OBR’s forecasts predict IHT will raise £7.2bn this financial year and as much as £8.4bn by 2027/28.
Stephen Lowe, group communications director at retirement specialist Just Group, commented on the continuing increase in IHT revenue, highlighting that the Government looks set to gain substantial returns from IHT in the coming years. He noted the spike in the number of estates paying inheritance tax in 2020/21.
“These big numbers are good news for the Exchequer but a warning for the public, reminding them to assess the entire value of their estate including an up-to-date valuation of their property,” said Lowe.
He also recommended professional, regulated advice to assist people in understanding the value of their estate and managing potential tax bills.
