IHT receipts received by HMRC continue to rise

Inheritance Tax (IHT) receipts for the period from April 2021 to February 2022 have totalled £5.5bn, new HMRC figures have confirmed.

This figure represents a £700m increase compared to the same period a year ago.

Last month, HMRC’s figures showed that IHT receipts totalled £5.0bn for the period from the start of the tax year up to the end of January – meaning a further £500m in IHT was raked in by the government during February.

This takes the total IHT receipts received by HMRC in the first two months of the year to £900m, after the latest figures follow the reported £400m in IHT receipts for January.

Commenting on the data, Hargreaves Lansdown senior pensions and retirement analyst, Helen Morrissey, said: “It is hugely positive to see people going back to work, but this data shows the heavy toll the pandemic has laid on society with IHT receipts hitting all-time highs – they could hit as much as £6bn by the end of the tax year.

“This is largely because of an increased number of wealth transfers throughout the year. While we hope the number of transfers will drop as the pandemic claims fewer lives, we will still see more estates become liable over the coming years as the freezing of IHT thresholds continues to bite.”

Quilter tax and financial planning expert, Shaun Moore, said: “These ever-increasing figures demonstrate that the government are gradually increasing tax revenues without significantly increasing the burden on taxpayers.

“However, IHT was once viewed as a tax on wealthier individuals, but due to runaway house prices more people are getting caught by the tax and many people who would not consider themselves wealthy will now face a hefty IHT bill. This is well reflected in the fact that London and the Southeast have the most amount of estates paying IHT, which is due to the above average house prices in the region.”

Canada Life technical director, Andrew Tully, added: “This will be welcome news for Chancellor Rishi Sunak today on the eve of the spring statement as the tax intake continues to grow across the board. IHT continues to prove it's worth to HMRC making it unlikely that the prolonged freezing of the thresholds will be defrosted in the near future.”

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