Home Business NewsBusiness Inheritance tax receipts hit record high

Inheritance tax receipts hit record high

by LLB Editor
21st Jul 23 10:50 am

Total IHT bill for this year is on track to hit £79 billion.

Late payment interest charge is stood at 7.5% spurring more to pay quickly while frozen bands will cost couples £170,000 by 2028.

Laura Suter, head of personal finance at AJ Bell, comments on the latest figures on the government’s inheritance tax take: “The amount the nation paid in inheritance tax last month is the highest on record, with the government getting £795 million in death taxes in June. The combination of rising house prices, rising investment markets and frozen tax-free bands mean that more and more estates are paying inheritance tax.

“While the government acknowledges that a few very large estates have skewed the payments for both this June and last June, receipts are still almost £1 billion more in the past twelve months when compared to the previous twelve months. In the first three months of this tax year the amount the nation has paid in inheritance tax is 11% higher than the same three months last year. If this trend continues the total IHT bill for this tax year will top £7.9 billion – far ahead of OBR expectations of £7.2 billion.

“Successive governments have chosen to freeze the nil rate band, dragging more people into the death tax net. Based on AJ Bell analysis, a couple would pay no IHT on assets up to £1.43 million by 2028 if the nil rate band, and residence nil rate band introduced in 2017, had been uprated by successive Tory chancellors going back to George Osborne. The policy of freezing IHT thresholds since 2010 could cost families an extra £170,000 in death duties.

“Currently, only one in 25 estates pay IHT, but that will rise during the time the thresholds are frozen. Increasingly this impacts the moderately wealthy – as those with large estates are covered by other thresholds and allowances and can afford professional help to minimise their bill.”

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