New data published today by HMRC shows that IHT receipts for April to August 2023 were £3.2 billion, which is £0.3 billion higher than the same period a year earlier.
Laura Hayward, tax partner at Evelyn Partners, the leading integrated wealth management and professional services group, comments:
“Rising IHT receipts are continuing to prove extremely lucrative for the Treasury and this doesn’t look set to change anytime soon. The Chancellor has recently played down the prospect of any imminent tax cuts but, even with the current IHT charging regime remaining in place, more families are being dragged into paying IHT. This is likely to be the result of allowances* being frozen until at least 2028 combined with inflationary growth of asset values.
“The latest update from HMRC provides a timely reminder for families that they may pay more IHT than they need to if they don’t plan ahead. It’s a complex area and so families may wish to consider taking professional tax planning advice to help them consider the different options available to them.
“One of the best places to start in reducing or eliminating an IHT bill is by considering gifting to family members. Gifts you make are generally not subject to IHT unless you die within seven years. There is also an annual gift allowance of up to £3,000 per tax year, and this will not be subject to IHT even if you do die within seven years.
“However, the possibility of reducing an IHT bill goes beyond gifting. Other options include investing tax efficiently, business relief and setting up trusts, which, in the right circumstances, allow assets to be tax efficiently passed on to the next generation while ensuring they are used in a responsible way.”