Inheritance tax receipts on course for 'record-breaking year'

However, the total amount was a reduction from the year before, when payments reached £749m, HMRC data revealed.

So far this year, the tax collector has gathered £5.3bn in IHT, up from £5bn over the first eight months of 2023.

From the start of the tax year in April, IHT intake was £300m higher at £3.5bn.

In total, taxpayers paid £342.2bn between April and August this year, a rise of £8.9bn compared to the same period in 2023.

There were increases in the amounts collected for income and capital gains tax (CGT), as well as National Insurance and business tax, by £5.4bn, £3.4bn and £600,000 respectively.

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The receipts for stamp duty land tax (SDLT) came to £1.1bn in August, slightly down from a total of £1.2bn the month before, Government figures showed.

The amount of SDLT collected by the department was flat year-on-year.

So far this year, homebuyers have paid £7.7bn towards stamp duty, up from £7.6bn last year.

Starting from April – the beginning of the financial year – the intake for SDLT was £5.3bn, up from £4.9bn the year before.

The threshold to pay SDLT was temporarily raised to £250,000 for all purchases and £425,000 for first-time buyers, a decision made in 2022 as part of the ‘mini Budget’ by the then Chancellor Kwasi Kwarteng. 

Provided no changes to the tax are announced in the Autumn Statement in October, this is expected to fall back to its usual level of £125,000 for all purchases and £300,000 for first-time buyers in March next year. 

This week, UK Finance published its Homes We Need report, which recommended maintaining the current nil-rate bands to improve homeownership affordability and reduce the upfront costs of moving home. 

High receipts ‘stoking Budget rumours’ 

Shaun Moore, tax and financial planning expert at Quilter, said the continued uptick in IHT receipts put it on course for “another record-breaking year”. 

He said this would “no doubt stoke the rumours and debates about whether the tax will be increased ahead of Labour’s first Budget”. 

Moore said: “As Labour navigates the complex issues surrounding IHT in the upcoming budget, there is a strong argument for simplifying the IHT system and making it more appealing to gift during one’s lifetime. The complexity of the current system often leads to confusion and inequities. A simpler system could help reduce the administrative burden for both taxpayers and HMRC, while also making it fairer.

“Similarly, increasing the gifting threshold would encourage earlier wealth transfer, reducing future IHT liabilities, and could boost consumer spending.”