IHT receipts reached £780m in April – the first month of the new financial year – HMRC figures have revealed.
Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, said the increase is “no surprise” given house price inflation and the freeze on IHT thresholds until at least 2030.
IHT is usually charged on an estate – the property, money and possessions of someone who has died – worth more than £325,000.
Although only around 4 per cent currently pay the tax, the rapid growth in wealth among older individuals means this number is set to rise to over 7 per cent by 2032-33, according to the Institute for Fiscal Studies (IFS).
He said: “This is no accident – leaked Government documents made it clear this week that IHT is still seen as a cash cow by some members of the Cabinet.”
Changes to IHT in the Budget were criticised.
At present, the Government plans to tax inherited agricultural assets worth more than £1m at a rate of 20 per cent – half the usual rate – from April 2027.
square INHERITANCE I have a £12m property business – here’s why I’m not leaving it to my children
Read More
Pension funds are also currently typically excluded from an estate for IHT purposes, but from April 2027 onwards, unused pension death benefits will be included as part of the estate for IHT. This change will mark a significant shift in many people’s tax planning strategies.
PAYE income tax and national insurance contributions (NICs) for April 2025 came in at £47.9bn, which is £2.8bn higher than the same period last year.
Shaun Moore, tax and financial planning expert at Quilter, said: “It’s a highly effective tactic for boosting Treasury receipts without overtly raising tax rates.
“Further upward pressure will come from the rise in employer NICs next month. The full impact of this policy change will become more evident in the months ahead as the changes bed in.”
How to reduce your IHT bill
Here are some of the ways you can reduce your bill, according to Halberda, the specialist financial adviser.
Managed gift giving: There are limits, but giving gifts of money or assets to loved ones is one of the most straightforward ways to reduce your IHT liability.
In general, every year you are allowed to give gifts of any value to a spouse or partner, or gifts of up to £3,000 to anyone else.
You can also make regular payments out of your income, which can help stop the value of your estate exceeding the £325,000 tax-free allowance.
Gifts given less than seven years before you due can be taxed, depending on the value and your relationship to the recipient.
Try a trust: Married couple and civil partners enjoy certain IHT exemptions. You can leave your entire estate – including your family home – to your spouse or civil partner with no IHT to pay, even if its value exceeds the £325,000 threshold.
But couples who are living together, no matter how long they have been in a relationship, do not qualify for this exemption.
Where there’s a will: By making a will, and reviewing it regularly, you can take advantage of all the exemptions and allowances that can help you keep your IHT bill as low as possible.
HMRC has been contacted for comment.
Read More Details
Finally We wish PressBee provided you with enough information of ( Inheritance tax receipts reach £780m – and it’s set to keep rising )
Also on site :