The latest inheritance tax figures from HM Revenue and Customs indicate that the tax is set to have "another record-breaking year", according to some industry experts.
Figures from HMRC showed that IHT receipts for April 2023 to October 2023 were £4.6bn, £0.5bn higher than the same period last year.
The figures reported the higher receipt in June 2023 and October 2023 can be attributed to a smaller number of higher-value payments than usual.
Canada Life tax and estate planning specialist, Julia Peake said: “The latest inheritance tax receipts indicates that we’re on a trajectory for another record-breaking year.”
She added that the receipts are on track to deliver the Treasury £158mn every week in revenue so far this tax year.
Additionally, Just Group group communications director, Stephen Lowe, shared a similar sentiment: “It is becoming increasingly clear that inheritance tax is on course to hit a record annual total for the third year in a row.
“At the current rate of tax collection, inheritance tax will raise over £7.8bn for the Treasury, far surpassing the Office for Budget Responsibility’s estimate for this year of £7.2bn as well as last year’s all-time high of £7.1bn.”
Lowe also looked at what this means ahead of the Autumn Statement tomorrow (November 22) for which cuts to IHT have been rumoured.
“It’s a useful source of revenue for the government, and if rumours are to be believed, tomorrow’s Autumn Statement will see any potential cut to inheritance tax delayed until the Spring,” he said.
Other receipts
Meanwhile, HMRC’s figures also showed that total tax receipts for April to October 2023 equaled £457.3bn, an increase of £23.9bn on the same period last year.
Income tax, capital gains tax, and national insurance contributions receipts were also highlighted in the figures, totalling £247.6bn for the period.
This represented a £11.2bn increase on the same period the previous year.
It additionally showed that PAYE income tax and NIC1 receipts were £232.5bn, which also represented an increase on the same period in the previous year - a rise of £11.2bn.
Autumn statement
Quilter chartered financial planner, Rosie Hooper, said the reported increase in receipts for both IHT, and PAYE and NICs could affect the Autumn Statement.
“This huge growth illustrates why the chancellor is weighing up tax cuts for tomorrow’s Autumn Statement to boost popularity with the electorate ahead of an election year.
“Though a cut to the headline rate of inheritance tax has been widely rumoured, it seems more likely now that this plan will be shelved in favour of a cut to income tax or NI.”
Hooper added that such a change would be more welcome given it could make a difference to lower income families, even if only marginal.
“A 1p cut to income tax or national insurance could allow basic rate taxpayers to save a maximum of £377 annually, increasing the disposable income of those households who need it most,” she also stated.
