Stamp duty receipts jump £8.9bn and IHT up to £2.9bn
Stamp duty paid to the government over the summer jumped by £2bn compared to the same period a year earlier while inheritance tax leaped by £300m.
Tax receipts for April to August 2022 for stamp duty hit £8.9bn, around a third higher than in 2021.
Lower receipts in 2021 were thanks to the temporary stamp duty holiday and lower sales following the Covid-19 pandemic, the government said.
August 2021 saw £1.6bn paid by buyers, the second highest amount in any month on record after December 2021.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “If the rumours of a cut to stamp duty are true, it’s good news for homebuyers who are being squeezed harder and harder by the tax on buying a home.
“Buying an average-priced home in England now comes with a stamp duty kicker of £5,579. That’s more than three times the £1,566 tax bill for an average-priced home in 2014 when the thresholds and rates were last set.”
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: “Stamp duty receipts continue to surge. This is not only a sign of a housing market in rude health but also down to the lingering after-effects of the stamp duty holiday, which ended in September last year.
“Whether we continue to see such steep increases in stamp duty over the coming months remains to be seen as the effects of this holiday are stripped out of the figures and soaring interest rates and cost-of-living crunch put a dampener on our plans to buy that dream home.
“There are also growing signs that homes are taking longer to sell which could also mean more would-be sellers are putting off the decision to put their homes on the market – this means we could soon see fewer sales feeding into lower receipts in the coming months.”
Inheritance tax receipts on the rise
Meanwhile, HMRC revealed IHT receipts for April to August 2022 stood at £2.9bn, £300m higher than in the same period a year earlier. It said receipts in April 2019 were particularly high, reflecting announcements (and subsequent delays and cancellations) of rises to probate fees in England and Wales, “which is likely to have caused executors to bring forward tax payments to avoid the prospective higher fees”.
This was then followed by lower receipts in April and May 2020, due to a temporary issue where HMRC was unable to accept cheques for payment of IHT due to Covid-19, which resulted in a peak in June 2020 receipts.
There were also higher receipts in October to November 2020, March to August 2021, and March 2022, which HMRC said is expected to be due to a combination of higher volumes of wealth transfers that took place during the Covid-19 pandemic, as well as recent rises in asset values, and the government’s March 2021 decision to maintain the IHT tax-free thresholds at their 2020/21 levels up to and including 2025 to 2026.
It also noted there were a small number of higher value payments than usual in June 2022 which led to record high receipts in the month.
Paul Barham, partner at Mazars, said: “It’s a stark reminder that IHT planning isn’t something that can be looked at once, and ticked off the list. This can be a common pitfall, as the value of your assets change, so must your plans. Other IHT planning points which are often overlooked are the use of personal gifting allowances, using clear expression of wish documents or even having a valid will in place.”
Overall, total HMRC receipts for April to August 2022 are £310.9bn, which is £31bn higher than in the same period a year earlier.