Inheritance tax receipts for April 2024 to January 2025 were £7bn, which is £0.7bn higher than the same period last year, according to the latest figures from the HMRC.
It indicates that the higher receipts in June 2022, November 2022, June 2023, October 2023, September 2024, and October 2024 can be partially attributed to a small number of higher-value payments than usual.
Commenting on the latest figures Quilter tax and financial planning Shaun Moore said: “This relentless rise in inheritance tax receipts is baked into government policy. With the nil-rate band (£325,000) and residence nil-rate band (£175,000) frozen until 2030, more and more families are being dragged into paying the tax.
“Rising house prices, particularly in the South East, mean many people that don’t consider themselves to be wealthy will now find themselves above the threshold and facing a 40% tax bill.
“Farmers and business owners are also feeling the pressure. The upcoming reforms to Agricultural Property Relief and Business Relief could force more family farms and small enterprises into difficult decisions about their futures. A tax once aimed at the wealthiest estates is now creeping further into the middle class, and with unspent pensions set to be taxed from April 2027, the government’s IHT windfall is only set to grow.
Moore added that inheritance tax remained one of the most resented taxes in the UK, yet the government was changing policy so more people than ever would pay it. “Without reform, families will continue to find themselves hit with unexpected tax bills on what they hoped to pass down,” he said.
Evelyn Partners head of estate planning Ian Dyall commented: “The inevitable monthly increase in inheritance tax receipts leaves little doubt that this will be another record tax year for IHT revenues as estates across the UK continue to grow in value and nil-rate bands remain frozen.”
He added: “Given the wide-ranging pressures on the public finances, with geo-political upheaval now prompting calls for greater defence spending, it might not be long before Rachel Reeves is again forced to seek new ways of boosting tax revenues. With the self-imposed limits on how she can do this, IHT remains one of the few ways the Chancellor can wriggle out of the fiscal strait-jacket.”
