Increased receipts from March 2022 are expected to result from a combination of factors: a rise in the volume of wealth transfers following recent deaths subject to inheritance tax (IHT), recent increases in asset values, and the government’s decisions in March 2021 and Autumn 2022 to freeze tax-free thresholds at 2020–2021 levels through to 2029–2030.
Ian Dyall, head of estate planning at Evelyn Partners, commented:
“The June figures show that IHT revenues for the current financial year are already 4.8% higher than during the same period last year — and it’s worth remembering that last year set a record.”
He noted that despite recent house price indices suggesting some softening in the property market, more families and assets are continuing to fall within the IHT net due to the ongoing freeze in nil-rate bands.
Dyall also predicted further significant increases in IHT liabilities across the UK, citing persistently high property and equity values. He added that changes set to take effect from next April — including reductions in business and agricultural property reliefs — as well as the inclusion of pensions within the IHT regime from April 2027, will likely add further pressure.