Figures released by HM Revenue & Customs (HMRC) show that inheritance tax receipts have hit record levels while new data shows it’s hunting down thousands of families that have not paid the correct liability on inherited estates.
Inheritance tax reaches record sums
In the first ten months of the 2023/24 financial year, HMRC collected £6.3bn in inheritance tax receipts, £0.4bn more than during the same period of the previous fiscal year. This represents a 7% rise and suggests this year’s annual figure will comfortably surpass last year’s record-breaking total of £7.1bn in inheritance tax receipts.
Frozen thresholds
The increase in inheritance tax receipts collected continues an upward trajectory that has been evident in recent years, largely as a result of the nil-rate threshold being frozen at £325,000 for over a decade. This, combined with growth in property prices, has effectively dragged more households into the IHT net.
Inheritance tax investigations rising
Recent years have also seen record amounts of underpaid tax clawed back by HMRC through a specialist team targeting the estates of wealthy deceased individuals. Data obtained via a Freedom of
Information request shows a total of 2,029 inheritance tax investigations were opened between April and November 2023, with £172m recovered in inheritance tax receipts over that period as a result of targeted investigations.
Inheritance tax concerns
New research¹ also suggests inheritance tax is the number one financial concern among wealthy individuals. In total, the survey found that more than a third of wealthy Brits are worried about IHT, with notable increases in levels of concern reported across both the 25 to 34 and 55 to 65-year-old categories over the past year.
Complex rules
The rules surrounding inheritance tax are notoriously complex and people therefore often require professional advice in order to find the most efficient solution for their personal circumstances. If you have any concerns or need advice in this area do get in touch; we’re always here to help.
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¹RBC, 2024
