Inheritance Tax liabilities statistics for the 2022 to 2023 tax year
• In the tax year 2022 to 2023, 4.62% of UK deaths resulted in an Inheritance Tax (IHT) charge, increasing by 0.23 percentage points since the tax year 2021 to 2022. This means that IHT is payable on fewer than 1 in 20 estates, as it has been since 2007 to 2008, and broadly since statistics were first produced. This proportion is now equal to its previous 2016 to 2017 high
• The total number of UK deaths that resulted in an IHT charge has also increased. In the tax year 2022 to 2023, there were 31,500 taxpaying IHT estates, an increase of 3,700 (13%) since the previous tax year, 2021 to 2022. Fewer than half of all deaths in any given year require interaction with HMRC to establish whether there is a liability to be paid
• IHT tax liabilities created in respect of the tax year 2022 to 2023 were £6.70 billion. This was a rise of £0.71bn (12%) compared to the previous year
Marc Acheson, Global Wealth Specialist at Utmost Wealth Solutions, said: “Today’s figures show that in the 2022–23 tax year – long before the Government’s changes to the Inheritance Tax regime at the Autumn 2024 Budget – more estates and trusts were being pulled into the IHT net and total liabilities continued to rise. This was largely driven by the decision to maintain the IHT tax free thresholds and rising asset values. With the nil-rate band still frozen and the changes to the IHT regime announced in the Autumn 2024 Budget, the number of estates exposed to IHT is likely even higher today. By the end of the decade, the OBR estimates that the proportion of deaths subject to inheritance tax will rise from 5.1% in 2022/23 to 9.5%. This figure is before factoring in any further possible changes the government may introduce such as the tightening of longstanding reliefs, which many now fear could be on the horizon. Combined, these developments are making the UK increasingly less attractive from a wealth perspective. Ever since the measures announced in the Autumn 2024 Budget, high-net-worths and non-doms have been leaving the UK at an unprecedented rate. At the same time, we have experienced strong and growing demand for financial advice from families seeking estate planning strategies to protect intergenerational wealth and avoid unintended tax consequences.”
Stephen Lowe, director at retirement specialist Just Group, commented: “The proportion of deaths liable to Inheritance Tax continues to creep ever upwards feeding on the ongoing freeze to thresholds and rising asset values. Reforms announced at the Autumn Budget 2024 are expected to significantly accelerate both the number and proportion of deaths that trigger IHT charges. It is estimated that around one in 10 deaths (9.5%) will be subject to Inheritance Tax by the end of the decade (2029/30) as these fiscal reforms kick in and pull ever more people into the thresholds. The removal of the pensions exemption from IHT will be the biggest driver of this increase with the OBR projecting that, from April 2027, this change will bring 31,200 more estates into scope of IHT before the end of 2029/30. A good first step for anyone who thinks their estate may be subject to Inheritance Tax, is to get an up-to-date valuation. This should include a recent assessment of their property wealth and it will also now be important to consider how any pension wealth could be taxed upon death. Estate planning is complex and difficult – especially with recent rule changes – and many people will benefit from professional financial advice to help manage their estate efficiently.”
HMRC Inheritance Tax liabilities statistics
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