Inheritance Tax totalled £4.6 billion for the HM Treasury between April and October - that’s £500,000 up on the same period last year, according to government data released just hours before the Autumn Statement.
The 12 per cent rise year-on-year is just the latest rise - IHT receipts have experienced a substantial increase in the past two years as more properties have passed the IHT threshold and the government freezing IHT tax-free thresholds at their 2020-2021 levels up to and including the 2027-2028 tax year.
IHT is a 40 per cent tax on the estate of those who have passed away, however it is only applied to the amount above the threshold of £500,000 if passed to the children or grandchildren of the deceased, while no tax is owed if the estate is passed to a spouse, civil partner, charity or community orgasnisation. If the estate is passed to someone that doesn’t fall within any of these categories, tax is charged on anything above the threshold of £325,000.
Chancellor Jeremy Hunt announced a tax raid on IHT in his Autumn Statement last year and froze the threshold above which people must pay IHT for another two years.
Kingswood Wealth Management says that with the impact of higher inflation, and IHT tax allowances not changed since 2009 when inflation was much lower,more estates than ever are likely to face an IHT bill as result of the changes.
That is, unless Hunt makes an announcement today - as has been widely previewed - saying that the tax would either be passed out or have its threshold ‘unfrozen’ to a higher level.
An analysis by probate brokers Final Duties shows that the annual amount paid in IHT has increased by 38 per cent since the pandemic.
It is thought that Hunt may also use today’s statement to do something to help first time buyers, possibly through reduced stamp duty.
Almost three quarters of homes on the market today would be exempt from Stamp Duty for home-movers if the Chancellor introduced a tax break similar to the one levied during the pandemic, according to Rightmove.
If the Chancellor removed SDLT on the first £500,000 of a purchase some 72 per cent of properties in England would be exempt from Stamp Duty.
The average stamp duty that a home-mover who is not a first-time buyer pays currently is £5,607, based on the average asking price of £362,143.
Rightmove says some 29 per cent of homes on the market are currently exempt from Stamp Duty for all home-movers, excluding second homes, while 62 per cent are currently exempt for first-time buyers.
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All these dreadfully unfair and immoral taxes based on nothing but inflation...
...not genuine "capital gains" but in reality tax on the ever depreciating pound and so the correspondingly larger number of pounds required to re-buy the exact same asset (property or other "investment") that probably hasnt changed at all in value in real terms or might even have gone down a bit....
...but they are still delighted to tax you at a rate of the pound approximately halving in value (and so the number required by your buyer when you sell it doubling) every 7 - 10 years.
...and the same but even worse on IHT that's also a tax on inflation, but levied on assets you've already been taxed on probably twice or more already.... plus they wait till you die to exploit you and your family for it.... Nice.
The government (and or Inland Revenue on its behalf) sits at the centre of its big, sticky web, with its tentacles for ever reaching out and grabbing anything it can from us, ie the more productive people subsidising the larger number who mostly contribute (and/or have taken from them) next to nothing.
By the way - inflation is also the government's friend for another reason too.... steadily clearing its ever growing burden of debt by also eroding its value (in pounds) while inflating the things we get skinned by CGT and IHT andcother taxes besides for....
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