The figure represents an increase of £134 million, or 6%, compared to the same period last year, when £2.09 billion was collected in April–June 2024/25, kickstarting a fourth consecutive annual record haul of £8.2 billion through the 2024/25 financial year. The OBR’s most recent forecast, published at the Spring Statement, projects another record year coming with IHT predicted to generate £9.1 billion for the Treasury in 2025/26 and revenues are expected to raise more than £14 billion by 2029/30.
Stephen Lowe, Director at retirement specialist Just Group, said: “Rising asset prices and frozen thresholds are combining in a pincer movement to drive consecutive record collections of Inheritance Tax. This year’s data, alongside reforms to the system announced at the Autumn Budget, shows that this trend is only set to accelerate in the coming years. It means Inheritance Tax is becoming an increasingly important revenue raiser for the Treasury amid creaking public finances. Anyone who is uncertain or concerned that their estate may be subject to Inheritance Tax should get an up-to-date valuation of their estate, including a recent assessment of their property wealth. Estate planning is complex and difficult – especially with tinkering to the rules – and many families who wish to manage their estate efficiently will benefit from professional financial advice.”
Nicholas Hyett, Investment Manager at Wealth Club said: “Inheritance tax continues to be a meal ticket for HMRC. While wealth taxes, IHT's uglier sibling, will be in the spotlight in the run up to the Autumn Budget it wouldn't be entirely surprising to see further tinkering with IHT too. As things stand inheritance tax may only affect a small percentage of estates, but that number is on the increase as an ever greater number of estates become liable for the most hated of taxes. This is a result of years of freezes in thresholds, matched with increasing house prices and rising inflation. Families who wouldn’t consider themselves to be wealthy at all may now face a bill on the passing of a loved one.
The current inheritance tax allowance has been frozen at £325,000 for 16 years, and remains frozen for another 5 years until 2030. The £175,000 residence nil rate band hasn’t changed since 2020. These freezes are a form of stealth tax, which allows the government to increase their take without a backlash from a headline grabbing tax hike, but still contribute to the highest tax burden in 70 years. The Chancellor has already hinted at U-turn on IHT for non-doms, thanks to the exodus of wealthy individuals over the last few months. But farmers who are lobbying hard for their own cause, have yet to see any relief, and rumours swirl that AIM could be a victim of double dipping as the Chancellor comes back to the UK's growth stock market looking for tax revenues. In this environment lifetime gifts are probably more attractive than ever, particularly regular gifts out of leftover income since these are immediately free of inheritance tax. This approach is particularly popular with grandparents, who use it to pay for things like school or university fees. Avoiding double taxation from inheritance tax is a nice added sweetener.
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