The £5.2bn figure is £0.4bn higher than the same period last year, according to data released by HMRC.
One of the key reasons for the rise in Inheritance Tax bills was the announcement, in last year’s Autumn Statement, to extend the IHT thresholds until 2028.
These thresholds, which see a 40 per cent tax levied on estates worth more than £325,000 but also allow homeowners to pass on properties worth up to £500,000 without paying IHT, were initially set to be frozen until 2026, but this was extended to 2028.
It means more people are now paying IHT, especially with historic property price rises, however, the overall numbers who pay this tax are still small – only around 4 per cent of deaths result in an IHT charge.
There were widespread rumours that Chancellor Jeremy Hunt would use his Autumn Statement to cut Inheritance Tax (IHT), but this forecast did not come to pass. Whether or not the much-maligned tax is cut closer to a General Election is yet to be seen.
Inheritance Tax has to change
Shaun Moore, tax and financial planning expert at Quilter said: “Inheritance tax receipts are expected to continue rising and we will likely see them beat the previous £7.1bn record before the end of the tax year.
“IHT is a highly emotive tax that can split voters, so we can expect it to continue being a battleground policy for both the Conservatives and Labour as we near the General Election. Though Jeremy Hunt opted not to make changes during his latest statement, we are expecting a budget to take place in March during which it could resurface if the Tories view it as a vote winner. Either way, some form of simplification of the tax is overdue.”
More caught out by IHT
Julia Peake, tax and estate planning specialist at Canada Life, highlighted that more and more people were being caught in the IHT net.
She said: “While speculation around changes to Inheritance Tax was rife in advance of the Autumn Statement, it yielded very little, with no changes in relation to the nil rate bands nor tax rate. With the latest tax data showing that IHT has delivered weekly receipts of £158mn, perhaps a status quo should come as no surprise given how much this tax has grown over the past few years.
“IHT is on course to deliver £9bn for the treasury by 2027/28, with all signs pointing to another record-breaking tax year this year.
“It’s important to remember IHT is not just a tax on the wealthiest in society, as many more estates are being caught in the expanding tax net. People think that they won’t be caught but with both the Standard and Resident nil rate bands remaining frozen until at least April 2028, and compounded by house price inflation, more people are finding that when their house becomes unencumbered by a mortgage it takes up most if not all of their nil rate bands.
“This results in other assets in their estate being hit by IHT. This will remain the case unless rumours of change materialise next year in the Spring Budget, with the unfreezing of thresholds.
More tax receipt rises
Meanwhile, HMRC also reported that income Tax, capital gains tax and National Insurance contribution receipts for April 2023 to November 2023 stood at £280.3bn, which is £12.1bn higher than the same period last year.
PAYE Income Tax and NIC1 receipts for April 2023 to November 2023 came in at £263.5bn, which is £12.1bn higher than the same period last year.
