Inheritance taxes on course to yield another record haul for taxman

Inheritance taxes are on course to yield another record haul for the taxman as HMRC takes in £597 million in April alone

• Figure means £20 million a day was claimed by Government for the hated tax

Hated inheritance taxes are on course to yield another record haul for the taxman after a bumper amount was paid at the start of the new tax year.

Official figures showed HM Revenue and Customs took in £597 million in April alone – £90 million more than in the same month last year.

That meant £20 million a day was claimed by the Government last month from the estates that the deceased left to their loved ones.

In the tax year ending in March, inheritance tax yielded £7.1 billion for the taxman, £1 billion higher than a year earlier.

And that was more than double the £3.1 billion total recorded a decade earlier.

Official figures showed HM Revenue and Customs took in £597 million in April alone – £90 million more than in the same month last year

Chancellor of Exchequer Jeremy Hunt speaking at the British Chambers of Commerce Global Annual Conference in London on  17 May 2023

Experts blame years of house price increases, soaring inflation and tax threshold freezes.

In the years before 2009, the threshold for paying inheritance tax was increased annually to account for inflation.

But it has been frozen at £325,000 since then meaning even relatively modest estates have been dragged into becoming liable for the 40 per cent charge – which is paid on assets above that level.

Alex Davies, chief executive of investment platform Wealth Club, said: ‘The 2023/24 tax year is looking likely to be yet another record-breaking year for inheritance tax. It really is a cash cow for HMRC.’

Mr Davies said an increase in the threshold or cut in the 40 per cent rate in the run-up to the general election ‘would be very welcome by the large numbers of affluent, but far from uber rich, households that are being hit by this most hated of taxes’.

Latest official figures yesterday illustrated the Treasury’s battle to balance the books as overall central government receipts fell by £2.7 billion even as its spending swelled by £22 billion.

That helped drive borrowing to a higher than expected £25.6 billion in April, £11.6 billion more than in the same month last year.

Ruth Gregory, deputy chief UK economist at Capital Economics, said: ‘April’s public finances figures got the new fiscal year off to a shaky start.

‘But we doubt this will prevent the Chancellor from embarking on a fiscal splurge ahead of the next election, due to take place before January 2025.’

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