HMRC raked in £5.9 billion from inheritance figures from April to January 2023 according to figures released this morning.
This is £0.9 billion more than in the same period a year earlier, continuing the recent upward trend. While the average bill was £216,000 in 2019/20, research conducted by Wealth Club suggests the average inheritance tax bills could reach £270,831 by 2025-26 and £288,611 by 2027-28 if current inflation expectations are met.
The government’s inheritance tax take seems to be increasing thanks largely to years of house price increases, especially in London and the South East That’s pushing families that probably wouldn’t consider themselves wealthy, over the threshold. In the Autumn Statement in November it was also announced that the inheritance tax threshold of £325,000 will be frozen until April 2028.
Alex Davies, CEO and Founder of Wealth Club said: “The revenue generated from inheritance tax plays an important part in the government’s spending programme. But this is no longer something just the very wealthy need to worry about. Thanks to years of frozen allowances, paired with house price growth and soaring inflation, families up and down the UK, most of which would not consider themselves to be especially affluent are also increasingly being affected.
No one likes to pay more tax than they need to, but the good news is that with a little bit of planning, there are a number of perfectly legitimate ways to reduce your liability. One of the great IHT threats arguably comes from where you least expect it: your ISA. Whilst tax efficient in so many other ways, ISAs form part of a person’s taxable estate along with other savings, investments and possessions, so up to 40% of could be eaten up by inheritance tax rather than passed to your loved ones.
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Inheritance Tax Receipts reach £5.9 billion in the months from April 2022 to January 2023