Inheritance Tax receipts for April 2024 to February 2025 are £7.6 billion, HM Revenue & Customs says.

This is £700 million higher than the same ten months last year and continues the upward trajectory over the last two decades. 

HMRC raised £7.499 billion in 2023-4 tax year, but these figures show that they are well on track to smash through this figure for the 2024-5 tax year end.

Nicholas Hyett, Investment Manager at Wealth Club, says: :@Inheritance tax continues to be a meal ticket for HMRC. It may only affect a small percentage of estates, but that number is growing. 

“OBR estimates suggest nearly 10% of estates will pay death duties by 2030 due to increasing house prices, changes to inheritance tax rules and years of allowance freezes.

“While we don’t expect to see any more changes to Inheritance Tax announced at the Spring Statement, the changes announced in the autumn are yet to kick in and will increase the inheritance tax take substantially over the next few years.  

“The main inheritance tax allowance has now been frozen at £325,000 for 15 years, and remains frozen for another five years until 2030, while the £175,000 residence nil rate band hasn’t changed since 2020. 

“These freezes are a form of stealth tax, which allows the government to increase their take without a backlash from a headline grabbing tax hike, but still contribute to the highest tax burden in 70 years. 

“With inheritance tax reliefs for AIM and private businesses set to be severely restricted, it has rarely been more difficult to avoid the taxman having your cake and eating it too. 

“Lifetime gifts are probably more attractive than ever, particularly regular gifts out of leftover income since these are immediately free of inheritance tax. This approach is particularly popular with grandparents, who use it to pay for things like school or university fees. Avoiding double taxation from inheritance tax is a nice added sweetener.”