You are here: Home - Mortgages - First Time Buyer - News -

Stamp duty receipts jump £8.9bn and IHT up to £2.9bn

Written by:
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.

The figures come ahead of Friday’s ‘mini Budget’ in which the Chancellor is reportedly considering another stamp duty holiday.

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.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week