Inheritance tax receipts totalled £7.6bn in the last 11 months, a record high and surpassing last year’s full-year total of £7.5bn.
Data from HMRC revealed today that the amount paid in tax was an 11.8 per cent increase from the same period last year.
“It may only affect a small percentage of estates, but that number is growing,” said Nicholas Hyett, investment manager at Wealth Club.
The Office for Budget Responsibility has forecast that nearly 10 per cent of estates will pay inheritance tax by 2030, due to increasing house prices, changes to tax rules and years of allowance freezes.
The main inheritance tax allowance has now been frozen at £325,000 for 15 years and is set to remain frozen for another five years.
So far this year, receipts from inheritance tax have been higher than in previous years in every month except June and November.
The month where 2024’s tax year failed to outclass previous years was due to “a small number of higher-value payments than usual,” HMRC said.
Monthly inheritance tax receipts
“While we don’t expect to see any more changes to inheritance tax announced at next week’s Spring Statement, the changes announced in the autumn are yet to kick in and will increase the inheritance tax take substantially over the next few years,” added Hyett.
The government faced significant pushback for its changes to inheritance tax last year, after instituting a £1m cap on Business Property Relief and Agricultural Property Relief.
Other measures announced in the Autumn Budget meant that unused pensions will also be subject to inheritance tax from April 2027.
Capital gains tax
Meanwhile, capital gains tax (CGT) receipts for February hit £1.3bn, bringing the total over the last year to £13bn, lower than last year’s figure of £14.5bn.
“The long-term trajectory of CGT revenues underscores its growing role in the Treasury’s tax strategy,” noted Shaun Moore, tax and financial planning expert at Quilter.
“A decade ago, CGT receipts stood at just £3.9bn per year; today, they have soared to nearly £10bn more per year. Successive governments have used a combination of lower allowances and higher rates to steadily expand the number of people affected.”