From April to September, inheritance tax receipts to the Treasury came to £4.3bn and some £736m was paid in September alone.
That’s a rise from £697m in the month before, according to HMRC’s monthly data.
The current threshold for paying IHT is 40% on estates worth more than £325,000 – the level it has been since 2010. But with house prices rising since then, to a UK average of £282,000 in 2024, more people are having to fork out on the tax.
In the Conservative’s Autumn Statement of 2022, the previous Chancellor Jeremy Hunt confirmed the frozen IHT level would remain until 2028.
Elsewhere, workers paid £226.8bn in income tax, capital gains tax and national insurance contributions in the six months between April and September, which is an increase of £6.2bn in the same period in 2023/24.
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Meanwhile, the stamp duty intake for September came to £1.1bn, flat on the previous month and slightly up on the £1bn paid a year ago, Government figures show.
Stamp duty land tax generated £8.8bn in receipts so far this year, compared to £8.6bn over the same period in 2023.
For the tax year starting in April, £6.3bn has been paid in stamp duty, up from £5.9bn last year.
With the Autumn Statement on 30 October a little over a week away and rumours swirling every day about the tax hikes Rachel Reeves might make, experts have predicted how the HMRC data will influence the announcement.
‘IHT is an absolute cash cow for HMRC’
Nicholas Hyett, investment manager at Wealth Club said: “Inheritance tax is an absolute cash cow for HMRC, which is why it remains in the spotlight ahead of next weeks’ Autumn Budget. No one knows what changes will be announced, but most agree there will be some attempt to milk more revenue from estates.
“The great thing about inheritance tax from the Government’s point of view is that it’s complicated, with a whole host of rules that could be tweaked to boost the tax take. Tweaks could include changes to Business Relief, including on AIM shares, making pensions subject to inheritance tax and extending the time period needed to make gifts inheritance tax free.
In 2023, 4.39% of all deaths in the UK were subject to IHT and Hyett added: “Whilst this may only affect a minority of people, it will infuriate those it does and could still do serious economic damage.”
“Removing the IHT-free status of pensions will also be damaging. It is in any government’s interest that people can support themselves in retirement. Constantly changing the rules puts people off saving in a pension, whether they are rich or poor.
“All Government’s need to balance short and long-term priorities. Throwing the kitchen sink at IHT may be good politics in the short term, but it risks doing long run damage.”
Laura Hayward, tax partner at Evelyn Partners, said it was “unlikely” that the latest figure would have any impact on the Chancellor’s plans for the Budget, as this would be “determined by fiscal projections and rules over the next five years”.
However, she added, “rising tax receipts can tell their own story about what Rachel Reeves is considering for the Budget in order to raise an estimated £35bn, particularly in the case of inheritance tax, capital gains tax and income tax”.
Hayward said: “The steady annual rise in IHT receipts has been ingrained in recent years as inflation has dragged more assets and more estates over the frozen nil-rate bands. Any changes aimed at increasing the IHT take beyond this fiscal drag effect are likely to reap outsize results over the coming years as the baby boomer generation reaches average mortality.
She added: “It’s not out of the question that the Chancellor could also look at the nil-rate bands, as the residential nil-rate band has come under criticism for discriminating against those who can’t or don’t want to leave their main property to a direct descendant.
“Could the residential nil-rate band be ditched with a less-than-equivalent increase to the main nil-rate band?”