New data from HMRC reveals soaring Inheritance Tax receipts

New data out today from HMRC shows that IHT receipts for April to August 2021 were £2.7 billion – £0.7 billion higher than the same period a year earlier.  

Julia Rosenbloom, tax partner at Smith & Williamson, the professional services firm commented:

“IHT receipts are proving to be an increasingly lucrative source of revenue for the Treasury and provide funds to the government to help re-build the country following the pandemic and pay for its planned programme of reforms. The prime minister’s recent announcement introducing a new health and social care levy demonstrates that he is not afraid of tax rises, even if they are unpopular with some members of his own party. This raises speculation that when the Chancellor unveils his Budget next month, personal taxes such IHT and CGT could be in for reform given the amount they raise for the Treasury.

“Some families are already facing increased IHT bills following the Chancellor’s announcement in this year’s Spring Budget that both the nil rate and residence nil rate bands are to be frozen until at least April 2026. On the back of soaring property and share prices more estates have therefore been brought into scope and some may be forced to sell family homes to settle what they owe to the tax authorities.

“With the clock ticking to possible personal tax reform in next month’s Budget, I’d urge families to start their tax planning as soon as possible and make the most of current allowances before any changes are introduced. Considering options such as making gifts and investing tax-efficiently could help reduce or eliminate an IHT bill, and maximise the chance of passing more assets on to your loved ones and causes you care about.”

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