December’s update from HMRC shows that Inheritance Tax (IHT) receipts reached £5.7 billion through the first two-thirds of this financial year (April to November). It marks an 11% increase on 2023/24 (£5.2 billion) through the same eight months of the year, putting 2024/25 on course for a fourth consecutive annual IHT-take record for the Treasury.
The data follows reforms to the IHT regime announced at the Budget which the OBR estimates will raise a further £2.5 billion by 2029-30, with receipts reaching £13.9 billion by 2029/30. By the end of the decade, the proportion of deaths subject to inheritance tax is forecast to rise from 5.2% in 2023/24 to 9.5% (2029/30).
Simon Martin, Head of UK Technical Services at Utmost Wealth Solutions, a leading provider of insurance-based wealth solutions, commented: “The IHT snowball continues to gather growing momentum as the extended freeze in Inheritance Tax thresholds and rising property prices looks set to continue delivering record tax hauls to the Treasury.
“Changes to the IHT and non-dom regime announced at the Autumn Budget will spread the net further, leading to more and more estates being caught up in the tax as the Treasury clamps down on certain areas. While Inheritance Tax is often perceived as one of the more unpopular taxes, there are steps that can be taken to mitigate its impact, and this Budget will no doubt create the stimulus for people to urgently assess their circumstances.
“We expect to see a spike in demand for professional advice around inheritance tax as individuals reconsider their plans, which could see strategies shift to lifetime gifting earlier and more often to individuals or trusts and perhaps spending their pension pots. There could also be increased interest in insurance policies and death benefits that can protect individuals against these rising IHT liabilities.”
Notes to Editors
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About Utmost Wealth Solutions
Utmost Wealth Solutions, part of Utmost Group plc, is a leading provider of insurance-based wealth solutions with approximately £57.2bn of assets under administration at 31 December 2023.
Utmost Wealth Solutions offers outstanding service and focused expertise to its clients and their advisers who are seeking intelligent, efficient solutions to preserve their wealth and safeguard it for future generations.