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Figures published by HM Revenue and Customs (HMRC) this morning, show that inheritance tax receipts hit £2.1 billion from April to June 2024/25 tax year.
This is £83 million higher than the same period in the previous tax year, and continues the upward trajectory over the last two decades. Last full tax year it raised £7.499 billion.
Inheritance tax remains firmly at the heart of the political debate given Labour Party’s pledge not to raise most of the other major sources of tax revenue, including Income Tax, National Insurance or VAT.
But a recent survey of Wealth Club clients, suggested that this could be an unpopular move. 42% of respondents said that if they could make cuts to any one tax, it would be inheritance tax.
Nicholas Hyett, Investment Manager at Wealth Club said, “Inheritance tax remains a political hot potato.
“The new government has promised not to raise a whole host of taxes, but inevitably there are spending pledges that need to be met. That means those taxes that haven’t been officially ringfenced, including inheritance tax, are firmly in the spotlight.
Reforms to non-dom rules are one potential source of an inheritance tax windfall, but with an estimated £100 billion being passed on in inheritances and gifts in the UK each year, there’s probably more in play if the government is determined to raise extra cash.
That puts agricultural and business relief in the firing line. But, reforms need to be handled sensitively. Abolishing either completely would be devastating to family owned businesses and farms across the country, while reliefs for the AIM market, Enterprise Investment Scheme and Seed Enterprise Investment Scheme provide vital funding for Britian’s smaller companies. The optimum tax system should focus on the behaviours it encourages as well as the revenues it generates.”
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