Wealth of Advice, Swale House, Mandale Business Park, Durham, DH1 1TH
Inheritance tax receipts for the period April to October 2024 reached £5bn, £0.5bn higher than the same period last year, data from HM Revenue and Customs revealed.
The latest figures suggest a likely fourth consecutive record annual IHT tax take for the Chancellor, as the tax continues its upward trajectory in the past few years.
Between 2024-25 and 2028-29, the OBR now estimates the Treasury will collect more than £50bn in IHT alone, a 19 per cent increase of more than £8bn compared to the forecast made following ex-chancellor Jeremy Hunt’s Budget in March this year.
Rachael Griffin, tax and financial planning expert at Quilter, said Chancellor Rachel Reeves’ Budget policy to incorporate pensions into the taxable estate from April 2027 would “turbo charge this data”.
“Farmers are also likely to start to bolster these figures as Agricultural Property Relief is made less generous. These changes mean more farmers may face higher IHT liabilities, potentially forcing difficult decisions about the future of family-owned farms,” she said.
“Similarly, the tightening of reliefs for AIM shares and Business Relief (BR) will also raise more for government coffers. These various changes are likely to drive greater urgency in estate planning, as taxpayers seek to navigate a landscape where traditional reliefs and exemptions are gradually eroded and new financial plans need to be laid,” she added.
Elsewhere, income tax, CGT & NICs receipts for April 2024 to October 2024 were £260.3bn, which was £6.4bn higher than the same period last year.
“These figures underscore the government’s reliance on fiscal drag and incremental policy changes to boost revenues without formally increasing headline tax rates,” Griffin said.
“While Labour has maintained its pledge not to raise taxes on working individuals, the combination of wage inflation and frozen thresholds means that taxpayers are increasingly being caught in higher tax brackets.
“As the government navigates these complex fiscal dynamics, it will be crucial to monitor the long-term impact on taxpayers and the economy. Policies aimed at raising revenue must strike a delicate balance to avoid disproportionately burdening certain groups or stifling economic growth.
“With tax receipts continuing to climb, the need for clear, transparent communication and strategic financial planning becomes ever more critical.”
If you want a better view of what your future could be, we'll have a chat over a cup of coffee in our Durham office and work out if we can add any value to your financial picture.
Wealth of Advice are authorised and regulated by the Financial Conduct Authority, reference number 563909. This website is for information purposes only and is not personal advice.
We are committed to providing products and service of the very highest standards. If you feel that we haven't lived up to your expectations in any way, however, we would like to know so we can put things right for you. If you have a complaint, make sure you contact us directly. Accordingly, we will do all we can to resolve your complaint by the end of the next business day. However, if we can't do this, we will write to you within five working days to tell you what we have done to resolve the problem, or acknowledge your complaint and let you know when you can expect a full response. Furthermore, if we haven't issued our response within eight weeks from the date you first raised your complaint, or if you're dissatisfied with our response, you can ask the Financial Ombudsman Service - www.financial-ombudsman.org.uk - for an independent review. The Financial Ombudsman Service will only consider your complaint once you've tried to resolve it with us, so please take up your concerns with us first and we'll do all we can to help.
Wealth of Advice Ltd is a company registered in England and Wales, company number 07709624.
VAT Number: GB131946515