UK’s inheritance tax bill continues to surge – HMRC takes £2.6billion in just three months

Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “With a quarterly take of around £2.6billion, inheritance tax is by no means the biggest tax we pay, but it’s certainly the most hated.”

Research by Hargreaves Lansdown in 2021 found a quarter of people said it was their “most despised” tax.

Ms Morrissey added: “This is despite the fact relatively few people actually pay IHT although years of frozen thresholds undoubtedly mean it’s becoming a growing issue that more people need to be aware of.

“Without any movement in these thresholds in the near future, we can expect these receipts to continue to grow as more and more families get dragged into its net.”

The high receipts in June are attributed to a small number of high value payments.

Ms Morrissey said: “The UK’s inheritance tax bill continues to surge with receipts for June the highest monthly total on record.

“HMRC puts this down to a small number of high value payments and the potential impact of increased interest rates on charges for overdue tax bills.”

Significant growth in property prices seen in recent years has been named a key contributor to people’s inheritance tax bills, however, the cost of living crisis seems to be cooling the market, with price falls and slowing activity being seen.

Ms Morrissey added: “Stamp duty receipts are a massive £2billion below what they were at the same time last year - this is partly down to lower stamp duty rates, but the more subdued market activity has certainly played its part and we will no doubt see further falls as the year goes on.”

Daniel Tomassen, senior manager in the private client department at accountancy firm HW Fisher, said today’s figures confirm HMRC is on track for a record-breaking year for inheritance tax receipts.

He said: “This is being driven by the Chancellor’s decision to freeze the inheritance tax nil rate band until 2028. This threshold hasn’t increased since 2009 despite inflation and explains why so many families are now finding themselves caught in the inheritance tax trap.

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“While we wait to see what the future holds for this tax, with rumours that the Conservatives might scrap it ahead of the next election, careful planning and making the most of the reliefs that are available is essential to make sure you are leaving as much as possible behind to your loved ones.”

Mr Tomassen also warned that the cost of making a mistake or late tax payments has increased.

He said: “People should also be aware that from today, it has become more expensive to make a mistake or to be late making tax payments.

“Late payment interest rate has now hit 7.75 per cent, making it even more crucial for individuals to make sure they are fully clued up on how much tax they owe to HMRC, and to make their payments on time.”