This morning’s tax receipts update from HMRC1 shows that Inheritance Tax (IHT) receipts reached £6.3 billion through the first three quarters of this financial year (April to December). It marks an 11% increase on the same period through 2023/24 (£5.7 billion), putting 2024/25 on course for a fourth consecutive annual IHT-take record for the Treasury.
Furthermore, the OBR estimates that policy changes announced at the Budget such as charging IHT on pension wealth transferrable at death and extending the freeze in nil-rate bands to 2029-30 will add £2.5 billion in IHT receipts by 2029-30.
Simon Martin, Head of UK Technical Services at Utmost Wealth Solutions, a leading provider of insurance-based wealth solutions, commented: “Inheritance Tax is delivering record receipts for the Treasury as asset prices rise while the thresholds remain frozen in place, a policy that has now been extended until the end of the decade.
“Additional reforms such as charging IHT on pension wealth at death and limits to agricultural and business reliefs will raise billions more pounds in tax receipts for the Government and increase the proportion of estates liable for the tax. However, there are steps to mitigate the impact of Inheritance Tax and so people should urgently assess the value of their estate to see if they are likely to be impacted.
“We are seeing a significant increase in clients seeking professional advice around Inheritance Tax to ensure they fully understand the implications of the reforms. There are complexities such as the tapering of the Residence Nil Rate Band for estates of a certain value which can potentially add to Inheritance Tax liabilities.”
1 – HMRC, tax receipts and National Insurance contributions for the UK: https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk/hmrc-tax-receipts-and-national-insurance-contributions-for-the-uk-new-monthly-bulletin
For further information, please contact:
Temple Bar Advisory
Alex Child-Villiers / Sam Livingstone / Alistair de Kare-Silver / Juliette Packard
Tel: +44 (0)20 7183 1190 / Email: [email protected]
About Utmost Wealth Solutions
Utmost Wealth Solutions, part of Utmost Group plc, is a leading provider of insurance-based wealth solutions. On a proforma basis at HY 2024 following the acquisition of Lombard International Assurance Holdings Sarl, Utmost Wealth Solutions would have managed approximately £103bn of assets under administration.
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.