Inheritance tax receipts hit £2.1bn from April to June, £83mn higher than the same period the previous tax year.
This continues the upward trajectory o the tax over the past two decades.
Quilter Cheviot chartered financial planner, Rosie Hooper, said that this represents a “significant” increase in IHT receipts.
She added the increase continues the “strong upward trajectory” in IHT receipts over the past few years.
Hooper attributed this to frozen tax thresholds which, as they show no sign of thawing under Labour, have “failed to keep up with inflation” leading to a continuous spike in the IHT take.
Additionally, Abrdn, head of savings policy, Alastair Black, said: “There has been much speculation that IHT is one of the taxes Labour may look at given its commitment to not raise other taxes.
“But this tax now affects more than just the super-rich with receipts continuing to rise. So it’s not obvious this is the place to go.”
Black added that, whatever the future holds for IHT, one “urgent task” at hand is simplifying the system for advisers and clients.
“As Baby Boomers are set to shift £1tn in assets this decade, IHT receipts keep climbing,” he explained.
“The frozen nil rate band and rising asset values are trapping more people in the tax's web and, with this in mind, advisers must be prepared to assist more families in passing down wealth wisely.
“This involves engaging not only with clients but also with their heirs to facilitate a seamless transition.”
He warned that, without a strategy to involve the beneficiaries of current clients, there's a risk of losing both assets and clients themselves over time, and therefore value for advisory firms.
“As IHT extends its grasp, advisers have a real chance here to prove their worth by guiding families through these discussions and ensuring their financial legacies are secure for the future,” Black concluded.
Additional receipts
The increased IHT receipts contributed to gross HMRC and national insurance contribution receipts reaching £195.1bn in the period between April and June.
This represented an increase of £4.7bn higher than during the same period in 2023.
The data additionally detailed that income tax, capital gains tax, and NICs receipts also saw an increase over the same period, standing at £108.3bn, an increase of £1.9bn on a yearly basis.
HMRC pointed out that this was despite the recent reduction in employee national insurance rates, from 10 per cent to 8 per cent, which became effective in April 2024 and affects receipts from May 2024 onwards.
tom.dunstan@ft.com
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