24 Apr 2024
Data published by HMRC has revealed that inheritance tax (IHT) receipts rose to a record high of £7.5 billion in the 2023/24 tax year.
The latest figure is £400 million higher than in the same period last year. Experts have predicted that IHT receipts could hit £9.5 billion before the end of the decade.
Chancellor Jeremy Hunt was previously under pressure to abolish IHT altogether, but opted for national insurance cuts in fiscal events instead.
IHT receipts have risen partly due to the threshold at which the tax is payable having been frozen at £325,000, preventing it from rising with inflation and bringing more families into its scope.
Ruth Gregory, Deputy Chief UK Economist at Capital Economics, commented: 'If the Chancellor was hoping March's figures would provide more scope for tax cuts at a fiscal event later this year, he will have been disappointed.
'Just based on the larger-than-expected budget deficit and the recent shift up in market interest rates, he may have even less fiscal 'headroom' (perhaps about £5 billion) for tax cuts than the £8.9 billion left over in March.'