IHT receipts set for record breaking year

HMRC has revealed that Inheritance Tax receipts were worth £4.6bn between April and October 2023, £0.5bn higher than the same period last year. As a result of this many experts believe that IHT is set for another record breaking year.

Higher receipts in June and October 2023 can be put down to a smaller number of high value payments than usual.

This news comes as the government considers slashing inheritance tax as part of the Autumn Statement tomorrow (22nd November).

However, Laura Hayward, tax partner at Evelyn Partners, stated that this may be something the Conservatives hold back for an election manifesto.

She said: “While abolishing IHT completely would be a popular move with many, it seems more likely that the government will reserve this as an idea for a Conservative election manifesto pledge.

“If the latest reports are to be believed, cuts to IHT are likely to take a backseat to other possible tax changes in tomorrow’s Autumn Statement. However, with Jeremy Hunt noting that ‘everything is on the table in an Autumn Statement’ it’s not impossible that we could still see changes of sorts to the IHT charging regime announced tomorrow.”

Hayward added: “There has been some speculation that there could be a cut to the rate charged, which is currently levied at 40% on estates above the value of £325,000. Some have also suggested that the main nil-rate band (£325,000) could be combined with the residential nil-rate band allowance (currently £175,000) to give a total IHT-free allowance of £500,000.

“Many will be hoping for changes here given that more and more families are being dragged into paying IHT by stealth as a result of the frozen allowances*, inflationary growth of asset values and other factors. This can be a complex area so taking professional advice can be one of the ways that can help families understand how to manage their money tax efficiently and help ensure they don’t pay more tax than they need to.”