A freeze in the inheritance tax (IHT) thresholds and rising asset prices are behind a record-breaking £7.6 billion boost to the Treasury in the first 11 months of the 2024/25 Tax Year, tax experts have said.
The latest figures from HMRC surpassed the full-year total of £7.5 billion recorded in 2023/24, with one month of receipts still to be counted and represent an 11 per cent increase from the same period last year when receipts stood at £6.8 billion.
[See also: Surge in Americans seeking British citizenship]
Experts warn the trend will continue to grow significantly in the coming years, making estate planning more crucial than ever.
The clock is ticking
IHT thresholds remain frozen, pushing more estates into the tax net as property values and asset prices rise and so boosting the Treasury’s coffers.
Simon Martin, head of UK technical services at Utmost Wealth Solutions, said that with Inheritance Tax rules set to widen from April 2026 and planned changes to IHT on pensions in 2027, the tax is expected to deliver record sums to the Treasury for the remainder of the decade.
Content from our partners
Tim Snaith, partner at Winckworth Sherwood, warned of the importance of tax: ‘The prolonged freeze means that an increasing number of estates are now liable for IHT.
‘This presents a persistent challenge in inheritance tax planning. Regular reviews of wills and estate planning, with professional legal advice, are essential to avoid unexpected financial burdens.’
[See also: The best tax and trust barristers in 2024]
Spear’s rising star, Andrea Jones, head of Irwin Mitchell private client advisory, warned that if the current policies remain unchanged, the number of estates paying IHT could more than double over the next few years.
‘The clock is ticking, with roughly a year to go before the new IHT rules take effect. Now is the time to consider gifting strategies, estate structuring, and the use of trusts to optimise wealth preservation and tax efficiency,’ Jones said.
