Inheritance tax receipts from April to July 2023 rose by £0.2bn compared to the same period the previous year, data from HM Revenue and Customs has revealed.
The data, published today (August 22), revealed that IHT receipts have reached £2.6bn since the start of the financial year.
This represented an increase on the £2.4bn that had been raised at the same point in 2022.
Canada Life tax and estate planning specialist, Julia Peake, said the increase means that “HMRC is on course for a year of record receipts from IHT”.
She added: “The Office for Budget Responsibility has forecasted that IHT will raise £7.2bn for the Exchequer this financial year.”
Peake attributed this possible record-breaking intake to “housing market buoyancy, despite the recent downturn in the market, and tax thresholds being frozen until 2027-28".
The data additionally revealed that receipts in June were the highest monthly total on record, something HMRC attributed to a smaller number of higher-value payments than usual.
It also pointed out that this also occurred in June and November of 2022.
HMRC additionally stated that the higher receipts in June could also be due to “possible effects from the recent rise in interest rates that HMRC is obliged to charge on overdue tax bills".
This follows increases in the Bank of England base rate.
HMRC added that the recent interest rate rises may have encouraged the personal representatives of some estates to pay any tax due sooner than they otherwise would have done.
However, HMRC are not able to confirm this until full administrative information becomes available.
Just Group group communications director, Stephen Lowe, warned that, while the figures may be “good news for the Exchequer”, they may not be so similarly positive for the public.
He stated that the data should remind savers to assess the entire value of their estate 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,” he added.
Higher receipts were expected from March 2022 onwards due to a combination of factors, such as higher volumes of wealth transfers following recent IHT-liable deaths, and rises in asset values.
Increased receipts were also predicted due to the government’s decisions in both March 2021 and autumn 2022 to maintain the IHT tax threshold at their 2020 to 2021 levels up to and including 2027 and 2028.
tom.dunstan@ft.com
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