The government has raked in £700m from inheritance tax (IHT) in the first month of the new financial year, HM Revenue and Customs (HMRC) data shows.
Evelyn Partners tax partners Laura Hayward noted the Office for Budget Responsibility’s forecast that the share of deaths resulting in the payment of IHT is set to rise 6.3% in the next four years.
“That proportion was as low as 2.7% in 2009/10,” she added. “Revenue from IHT and its predecessors has increased over time in real terms from around £2bn in 1980/81 to £7.5bn in 2023/24.”
Hayward said HM Treasury was also likely to continue raking in more due to a “demographic bump”.
“As the wealthy Baby Boomer generation dies off in the next couple of decades, there will be the major transfer of wealth,” she noted. “Older generations have as much as £2.6trn of equity tied up in their homes.”
Weightmans head of private wealth Richard Bate said fiscal drag was also still having a strong impact on who gets caught up in the government’s tax net.