Inheritance tax receipts reached £1.4bn for April 2024 to May 2024, £0.2bn higher than the same period last year, data from HM Revenue and Customs has revealed.
The latest HMRC tax receipts monthly bulletin found that IHT receipts have had an annual increase of 16.6 per cent.
Higher receipts than March 2024 was attributed to a higher volume of wealth transfers following recent IHT-liable deaths, recent rises in asset values and IHT frozen thresholds.
Laura Hayward, tax partner at Evelyn Partners said after just two months IHT receipts are well on the way to a “record total” for the 2024/25 tax year.
“IHT has turned into a spectre at the electoral feast which no one really wants to mention by name, never mind grapple with. Labour named it once in its manifesto, confirming its pledge to end the use of offshore trusts, which is a matter affecting mainly non-doms.
“While the Conservatives promised to retain business-related reliefs, they made no other pledge on IHT, with not one mention of the word ‘inheritance’ in their manifesto – quite a climbdown from the situation less than a year ago when the possible abolition of IHT was being touted for the 2023 Autumn Statement.
“Even if a new government is shy of making transparent and potentially unpopular decisions to tax the passing on of wealth more harshly, then fiscal drag is doing a similar job behind the scenes anyway.
“With both property and financial market assets continuing to surge in value, there is no prospect of the trend abating for more estates, and more assets in each liable estate, being dragged over the frozen thresholds at which IHT kicks in,” she added.
Nick Henshaw, head of intermediary distribution at Wesleyan, thought it was “shocking” that the main political parties did not mention IHT in their manifestos.
He said: “The simple fact is that IHT is no longer just a tax for the super-wealthy, as it was designed. We urge whoever takes power to revisit it and ensure it is fit for purpose today, as well as streamlining it to make sure that it is as easy as possible for families to engage with.”
Other findings
HMRC also reported that its total tax receipts for April 2024 to May 2024 were £132.8bn, £3.6bn higher than the same period last year.
Receipts were higher from income tax, capital gains tax and national insurance contributions, business taxes and stamp taxes, while receipts were lower from VAT and fuel duty.
More specifically, PAYE income Tax and national insurance contribution receipts for April 2024 to May 2024 were £77.2bn, £2.8bn higher than the same period last year.
alina.khan@ft.com
