HM Revenue & Customs data has revealed that a record amount of £7.5billion in Inheritance Tax (IHT) was paid to the Treasury in the 2023/24 tax year.

Total receipts for April 2023 to March 2024 were £0.4billion greater than the all-time high of £7.1billion in 2022/23, an increase of 5.6%

The Office for Budget Responsibility’s projection of IHT receipts reaching £9.7 billion by 2028/29, doubling as a percentage of GDP since 2009, is also a concern.

This surge in revenue, attributed mainly to asset price inflation and stagnant Inheritance Tax thresholds, signifies a substantial fiscal drag. As the freeze persists, the burden of IHT is poised to intensify, posing significant implications for taxpayers and estate planning alike.

Even without an exceptional transfer of wealth, more estates and more assets in each liable estate are being dragged over the threshold at which IHT kicks in as the value of financial assets and property increases. The modest property downturn of the last year or so, which missed some parts of the UK entirely, seems to be over – so with the residential nil-rate band also frozen at £175,000, the trend of families or individuals with modest levels of wealth mostly held in property being subject to this 40% tax will continue.