UK taxman HM Revenue & Customs (HMRC) data has revealed that inheritance tax brought in £557m ($621m, €635m) in September 2022.
It takes the overall tax-take to £3.5bn in the first half of the 2022/2023 tax year – a new record that far surpasses the previous high of £3.1bn recorded in H1 2021/22, and the £2.9bn in H2 2021/22.
Inheritance tax surpassed £6bn in 2021/22 for the first time ever with the current tax year now set to post consecutive all-time high tax-takes.
Stephen Lowe, group communications director at retirement specialist Just Group, said: “It is no surprise that inheritance tax continues to rake in ever-increasing receipts for the Treasury. Frozen thresholds and soaring property prices that added £1bn of housing wealth every day to the estates of over-55 homeowners since the start of the pandemic have combined to tip more estates into paying IHT.
“The nil rate bands – the size of the estate that can be left without paying any inheritance tax – are due to remain frozen until 2026 and with government scrabbling to fill a fiscal hole, the likelihood of any increase in IHT thresholds before then seems vanishingly small.
“It is another reminder of the importance that people regularly assess the full value of their estate so they get a clear picture of whether IHT will affect them and understand what steps they can take to mitigate it. For some people, options such as lifetime mortgages could be an opportunity to unlock a portion of their wealth tied up in bricks and mortar.
“Passing on this wealth through ‘living inheritances’ allows people to see the benefit for recipients particularly if it helps loved ones through the current cost-of-living crisis, and it can minimise the Inheritance Tax payable on their estates.”
Julia Rosenbloom, tax partner at Evelyn Partners, added: “This further year-on-year increase in IHT receipts will be music to the ears of a Treasury that has a difficult task of attempting to balance the books following September’s mini-Budget.
“Given the current state of the UK economy and need to boost the government’s coffers, new Chancellor Jeremy Hunt will want to do all he can to preserve cash cows, such as IHT receipts, until stability is restored to the nation’s finances.
“Families face the bleak reality that even if the IHT regime remains unchanged in the months ahead, more people will be pushed into its scope. Frozen allowances – in the form of the nil rate band and residence nil rate band which have both been