Inheritance tax receipts up by £0.7 billion year-on-year, HMRC data shows
New HMRC data shows that IHT (Inheritance Tax) receipts for April 2021 to March 2022 were £6.1 billion – £0.7 billion higher than the same period a year earlier.
HMRC expressed that it expected a larger amount of receipts due to “higher volumes of wealth transfers that took place during the Covid-19 pandemic.”
The data also showed that receipts were higher from VAT, income tax, capital gains tax and National Insurance Contributions, corporation tax, stamp taxes and hydrocarbon oils.
The report also showed that cash receipts were higher from VAT by £55.6 billion, particularly because of the VAT payment deferment policy.
Julia Rosenbloom, Tax Partner at Tilney Smith & Williamson, comments: “The latest reported year-on-year rise in IHT collections will be welcomed by the Treasury that needs every pound it can get at the moment to pay for the government’s ambitious spending commitments against a backdrop of ongoing global uncertainty.
“Given that the Office for Budget Responsibility recently forecasted that the Treasury will receive £37bn in IHT payments over the next five years, now is the time for families to take action and look carefully at their tax planning.
“Even before any possible changes to IHT in the next Budget later this year, many people can expect to see increased IHT bills following the Chancellor’s decision to freeze both the nil rate band and residence nil rate band until at least April 2026. With rising property prices, more families are being brought into scope for IHT and this is forcing some to face difficult decisions – such as potentially needing to sell family homes to settle IHT bills.
“By taking professional advice and planning ahead, families may have an opportunity to reduce or eliminate their IHT bill through considering investing tax-efficiently and making gifts to family members.”