Inheritance tax receipts hit a record of £7.5bn as 2023/24 year ends

‘IHT is the tax gift that keeps on giving as record receipts have been banked’

New inheritance tax (IHT) data published today (23 April) shows the government raked in a total of £7.5bn in 2023/24 – a £4m increase on the tax year prior.

This represents the highest value ever recorded and continues the upward trend of the last two decades.

“Today’s data will be sharpening some clients’ minds to the threat they may face,” warned Wesleyan head of intermediary distribution Nick Henshaw. “It’s an opportunity for advisers to once again show their value in helping them manage and mitigate IHT risk – whether that’s through avenues like trusts, or pension funding.”

With a general election expected in the UK this year, Henshaw said the much-debated tax was “likely to remain on the political agenda” after going unmentioned in the 2024 Spring Budget.

“Whatever potential reform or changes are suggested in the months ahead, advisers will have an important role to play in helping clients cut through the noise ultimately keep their strategies, and focus, on likelihoods and the long-term view,” he added.

Despite continued speculation that the government will reform IHT, Quilter tax and financial planning expert Rachael Griffin said today’s figures “illustrate exactly why the chancellor would have been keen to leave it well alone”.

She continued: “Nonetheless, the ever-increasing tax revenue from IHT presents a conundrum for the government as we approach the general election, and it is certainly an area to watch for as the various party manifestos begin to appear.”

Griffin said a lowering of headline rate would “undoubtedly be met with approval” from Conservative Party voters but said it would likely continue to be an unpopular tax more widely.

“It would benefit the rich at a time when so many across the nation continue to struggle with the cost of living,” she said.

Evelyn Partners tax partner Laura Hayward explained she was now expecting an escalation of IHT liabilities.

“Not least because there is a massive transfer of wealth in the offing in the next couple of decades,” she concluded.

Hope Coumbe (Professional Adviser)

Retirement ProfessionalsInheritance tax receipts hit a record of £7.5bn as 2023/24 year ends