Latest HMRC Figures Show Inheritance Tax Continues To Rise

Inheritance tax receipts were up again for the period April to December 2024 and for the last twelve months.

According to HMRC’s latest statistics inheritance tax (IHT) receipts for April 2024 to December 2024 were just over £6.3 billion, which is more than £0.6 billion higher than the same period last year, of just over £5.7 billion. And, for December 2024, receipts were £620 million, which is considerably higher than the receipts for December 2023 of £547 million.

This is mostly attributed to rises in asset values, and the freezing of the IHT tax-free thresholds.

The above chart contains 12-month rolling receipts since March 2013. Receipts for the 12 months to November 2024 were £8.124 billion. This figure is considerably higher than the equivalent figure for the 12 months to November 2023, which was £7.491 billion.

The OBR’s latest Economic and fiscal outlook (EFO) – published on 30 October 2024 - forecast the following IHT receipts for the current tax year and future tax years: £8.3 billion for 2024/25; £8.7 billion for 2025/26; £9.5 billion for 2026/27; £11.2 billion for 2027/28; £12.2 billion for 2028/29; and £13.9 billion for the following year, 2029/30.

These forecasts are much higher than the OBR’s March 2024 forecasts, partly due to house and equity prices being stronger than expected and partly due to policy changes announced in the 30 October 2024 Budget impacting IHT. These include charging IHT on pension wealth, limits to business property relief, and extending the freeze in IHT allowances like the nil-rate band to 2029/30.

The current, and predicted future, high IHT receipts should serve as another reminder of the importance of IHT planning and of making full use of any IHT exemptions and reliefs available. Indeed concerns over IHT continue to be one of the leading reasons clients come to us for our expertise in the area.

If IHT is potentially an issue for you and your family, especially in light of the recent budget changes, then definitely get in touch for a relaxed initial chat with us. To arrange a complimentary financial planning review, please call Laura on 0117 3636 212 or email her at office@haroldstephens.co.uk