Inheritance tax receipts have continued to climb, figures released this morning by HM Revenue and Customs (HMRC) show.
The government raked in £6.3bn from IHT in the nine months from April to December 2024.
This is £600m more than in the same nine-month period last year and continues the upward trajectory of the last two decades.
For the full 2023-24 tax year IHT receipts hit a record £7.5bn, so the figures are on track to comfortably hit a fresh record high in the 2024-25 tax year.
According to figures from Wealth Club, 4% of estates are liable for IHT under the current rules but government estimates suggest that this will increase to 10% of estates by 2030.
The latest rise in the IHT take comes as a consultation on bringing unused pension pots into IHT concludes. Should that be implemented, receipts would rocket.
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Nicholas Hyett, investment manager at Wealth Club said: “Inheritance tax continues to be something of a golden goose for HMRC – with a tax take that seems to rise inexorably.
“It may only affect a small number of estates at present, but that number is growing all the time – suggesting “Britain’s most hated tax” is only set to become more unpopular.
“What really gets to many people about inheritance tax is the double taxation,” he continued. “You’re taxed on the money when you earn it and again when you die, resulting in combined income tax and inheritance tax rate of 67% for additional rate tax payers – potentially more if you’re also paying National Insurance.”
Shaun Moore, tax and financial planning expert at Quilter added: “This relentless rise is no coincidence. With inheritance tax thresholds frozen until 2030, more families are being pulled into the scope of IHT, and this trend shows no signs of slowing.
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“Add to that the significant changes coming in April 2027, when pensions will be drawn into taxable estates, and the government looks set to cash in on an ever-expanding pool of taxpayers.
“Farming families, too, could face tougher times as reductions to Agricultural Property Relief start to bite, potentially forcing some to make difficult decisions about the future of their farms. Meanwhile, tweaks to Business Relief and AIM share rules are also likely to keep boosting HMRC’s coffers in the years ahead.”
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