HMRC’s latest update on Inheritance Tax (IHT) receipts show that £4.6 billion was collected through the first seven months of the 2023/24 Financial Year

HMRC’s latest update on Inheritance Tax (IHT) receipts show that £4.6 billion was collected through the first seven months of the 2023/24 Financial Year – a 12% increase on the same period in the previous year (£4.1 billion through the first seven months) with the tax likely to raise yet another record annual total for the Chancellor of the Exchequer.

There had been speculation that Jeremy Hunt would use The Budget to propose a cut to Inheritance Tax, but he did not.

Inheritance Tax is not widely understood as research from Just Group reveals the majority (59%) of retirees over 55 don’t know what the threshold is for the value of an estate to pay Inheritance Tax and a further 50% of this age group don’t have a clear understanding of the rules. Stephen Lowe, group communications director at retirement specialist Just Group, commented:

HMRC’s latest update on Inheritance Tax (IHT) receipts show that £4.6 billion was collected through the first seven months of the 2023/24 Financial Year

“As figures start to become available for the second half of the financial year, it is becoming increasingly clear that Inheritance Tax is on course to hit a record annual total for the third year in a row.At the current rate of tax collection, Inheritance Tax will raise over £7.8 billion for the Treasury, far surpassing the OBR’s estimate for this year of £7.2 billion as well as last year’s all-time high of £7.1 billion. It’s a useful source of revenue for the government, and if rumours are to be believed, tomorrow’s Autumn Statement will see any potential cut to Inheritance Tax delayed until the Spring.

Only a very small proportion of households are impacted by IHT, but the tax continues to raise more revenue for the government, so it bites deep on those estates affected. Our research suggests there is a low level of understanding around the Inheritance Tax rules and thresholds, with the majority unaware of how much their estate must be worth to incur a tax charge.”