HMRC’s latest update on Inheritance Tax receipts shows that £5.0 billion was collected through the first seven months of the 2024/25 Financial Year – an 11% increase on the £4.6 billion received in the same period in the previous year – setting up a likely fourth consecutive record annual IHT tax take for the Chancellor of the Exchequer.
The latest figures follow the Budget where reforms to the IHT regime were announced including a freeze on the current thresholds for an additional two years, bringing inherited pensions into scope from 2027 and reforming Agricultural Property Relief and Business Property Relief.
Between 2024-25 and 2028-29, the OBR now estimates the Treasury will collect more than £50 billion pounds in inheritance tax alone, a 19% increase of more than £8 billion compared to the forecast made following ex-Chancellor Jeremy Hunt’s Spring Budget in March this year.
Stephen Lowe, group communications director at retirement specialist Just Group, commented: “Inheritance Tax has provided a steady stream of income for the Treasury and this year is on track to grow to new record levels for a fourth year in a row. These increases start to look modest compared to the forecast inheritance tax takes following the reforms announced in the Budget.
“With the thresholds frozen for another two years, any growth in property prices or other assets will drag more estates over the threshold, as reflected in the number of deaths subject to IHT now forecast to reach nearly 10% by the end of the decade.
“These changes underscore the importance of people staying on top of the value of their estate and keeping an eye on the future. As a starting point, we encourage people to make sure they have an up-to-date valuation of their estate to help them understand if they are likely to incur IHT.
“Estate planning is complex and professional financial advice can be immensely helpful for people who want to manage their estate efficiently and pass on the maximum inheritance to loved ones.”
