IHT receipts

The Government Nets £2.6bn From IHT

havenifa

havenifa


Posted on: 28th August 2023

Inheritance Tax (IHT) receipts between April and July 2023 have seen a £0.2bn rise in the last year. Data from HMRC has revealed IHT receipts have reached a staggering £2.6bn since the start of the financial year – representing an increase on the £2.4bn raised at the same point in 2022.

How This Has Happened

The June figures showcase the highest monthly total recorded, which could be resulting from recent rises in interest rates. HMRC is obliged to charge on overdue tax bills following recent increase in the Bank of England base rate.

Julia Peake of Canada Life, a specialist for tax and estate planning, detailed how HMRC was on track for a record in receipts from IHT, with the Office for Budget Responsibility forecasting that IHT will raise £7.2bn for the Exchequer this financial year. Areas such as housing market buoyancy in the face of a recent downturn in the market and tax thresholds frozen until 2027-28 also attributed to the possible record-breaking intake.

Steps for Protection

The data presented is a strong indicator that savers should take immediate steps to assess the entire value of their estates, including more up-to-date valuations on their property. Professional, regulated advice from independent financial advisers Manchester is helping people to work out the total value of their estates, calculate how much tax they would likely owe and explore every option available to manage their tax bills.

Higher receipts were an expected avenue in March 2022 due to many factors, including higher wealth transfer volumes following recent IHT-liable deaths and a rise in asset values. Increased receipts were also a cause of concern following the Government’s 2021 and 2022 decisions to maintain the IHT threshold at 2020/2021 levels up to 2027/2028.

Helping Your Family Against IHT

Whilst this may be good news for the Exchequer, it is a big red warning sign for the public. Having conversations with independent financial advisers Cheshire about estate planning and how you want your assets protected and passed on in the future needs to happen much sooner than you expect to. Inflationary growth of asset values and frozen allowances result in many people dragged into paying IHT and leaving their descendants in difficult financial positions.

If you want to prevent your loved ones from having to sell a family home or take on more debt just to settle a large IHT bill, you need to know of the opportunities and avenues available to you to greatly reduce the liability.

Contact our professional independent advisers at Haven IFA to discuss how to protect your loved ones from IHT taking a heavy toll on your legacy.