Inheritance tax receipts for the present tax 12 months to-date have reached a document £5.3bn, in accordance with the most recent figures printed by HMRC.
The determine was £700m greater than the identical interval a 12 months earlier.
The upper determine – which covers April to December 2022 – suggests IHT receipts this 12 months are on observe to hit a brand new document this tax 12 months, topping final 12 months’s £6.1bn.
For the ultimate quarter of the calendar 12 months, the IHT take hit £1.8bn – the best complete on document and up from £1.4bn in 2021.
Stephen Lowe, group communications director at retirement specialist Simply Group, stated: “The Treasury seems to be set to gather a document amount of money from inheritance tax this monetary 12 months and forecasts predict almost £8bn a 12 months shall be raised from the levy by 2027/28.”
Why are IHT receipts anticipated to rise so rapidly? Primarily as a result of in his Autumn Assertion in November, Chancellor Jeremy Hunt opted to freeze the IHT threshold of £325,00 for an additional two years, to 2027/28.
Andrew Aldridge, companion at Deepbridge Capital, stated: “Given the Chancellor’s freezing of IHT thresholds for an additional two years and inflation remaining excessive, we anticipate that HMRC receipts will proceed to rise within the close to time period.”
Alex Davies, chief govt and founding father of Wealth Membership, stated: “Rampant inflation and years of frozen allowances and hovering home costs imply many extra households will discover themselves hit with a hefty inheritance tax invoice.”
Shaun Moore, tax and Monetary Planning knowledgeable at Quilter, stated the freeze on IHT thresholds to 2027/28 might truly internet the federal government greater than £1bn. He stated: “Runaway home costs and stagnant thresholds imply extra individuals are dying with property wealth over the assorted inheritance tax allowances.”
However he added that the brand new figures additionally shone a light-weight on why the federal government prolonged the freeze to revenue tax thresholds as much as 2027/28. Receipts from revenue tax and NI funds from April to December 2022 reached £281.1bn – a rise of £34.3bn in comparison with the identical interval a 12 months earlier.
Mr Moore stated: “This upward pattern is more likely to proceed as wage development rises in gentle of inflation, however revenue tax thresholds keep static.”
1,000,000 extra individuals shall be paying greater fee tax by 2027, in accordance with forecasts printed by HMRC.