HMRC confirms 2023 as record-breaking year for inheritance tax as receipts go up by £1 billion
We recently noted that more people than ever are being hit by Inheritance Tax as HMRC posted a new record for IHT receipts. This news came while there was still a month remaining in the tax year and now that 2022/23 tax year is complete, the full scale of this record-breaking year is now apparent.
Last year HMRC pulled in a massive £7.1 billion, up £1 billion from the 2021/22 tax year. This represents an increase of 16% from the £6.1 billion raised in IHT in the previous year, with £700,000 in IHT receipts being generated in March 2023 alone.
It has previously been predicted that the Treasury could earn as much as £45bn from inheritance tax in the 5-year period from 2022/23 – 2027/28 and these latest figures only serve to reinforce these estimates.
These increases in IHT takings show that more and more people are finding themselves facing an inheritance tax bill following the death of a loved one. This is because the current inheritance tax nil-rate band of £325,000, which was first introduced in 2009, has remained frozen, despite the rapidly rising house prices and inflation. It’s now estimated that by 2027/28, 6.7% of deaths will trigger an inheritance tax charge, a 61% increase from the roughly 4.1% of deaths affected in 2022/21.
Robert Husband, CEO of Tower Street Finance, said: “These latest numbers from the Treasury are not surprising and confirm that inheritance tax is an increasingly big earner for HMRC.
“With the recent rises in house prices and inflation driving up the value of people’s estates, an increasing number are going to be faced with an unwelcome IHT bill in the coming years something that can pose a financial challenge to executors. This is where products like our Executor Loan can be a real help, by funding the cost of the IHT bill and enabling people to unlock an estate and access their inheritance with no risk to themselves.”