Inheritance Tax Receipts Reach £5.3 Billion
Inheritance Tax Receipts reach £5.3 billion in the months from April to December 2022, £700 million higher that the same period a year earlier, according to new figures from HMRC
Figures released by HMRC today show that the Treasury raked in £5.3 billion in inheritance tax receipts in the months from April to December 2022. This is £700 million more than in the same period a year earlier, continuing the upward trend.
The government’s inheritance tax take seems to be increasing thanks largely to years of house price increases, especially in London and the south-east, pushing families that wouldn’t probably consider themselves wealthy, over the threshold. In the Autumn Statement in November it was also announced that the inheritance tax threshold of £325,000 will be frozen until April 2028.
The revenue generated from inheritance tax plays an important part in the government’s spending programme. While the average bill was £216,000 in 2019/20, research conducted by Wealth Club shows the average inheritance tax bills could reach £304,567 by 2025-26 and £345,084 by 2027-28.
Alex Davies, CEO and Founder of Wealth Club said: “Contrary to popular belief, inheritance tax doesn’t just affect the super-rich, many who would not consider themselves wealthy at all will also bear a considerable burden. Rampant inflation and years of frozen allowances and soaring house prices mean many more families will find themselves hit with a hefty inheritance tax bill which they might not have envisaged or planned for.
“No one likes to pay more tax than they need to and Inheritance tax is probably the most hated of all taxes. But with a little planning, there are a number of perfectly legitimate ways to reduce your liability. Pensions can be passed on to the next generation relatively tax efficiently. The greatest IHT threat probably comes from where you least expect it: your ISA. Contrary to what many think, ISAs are not IHT free. So, if you do nothing, up to 40% of your long-term savings could eventually be eaten up by tax. An alternative is to invest in an AIM ISA, a managed portfolio of AIM shares that can be IHT free after two years. You still get the ISA benefits of tax-free income and growth for as long as you live, but you don’t need to worry about IHT on top.
Companies In This Post
- A Falling King Dollar Signals a Reprieve for Emerging Markets Commentary From Crown Agents Bank Read more
- Uome Launches New Point of Sale Feature That Comes With a Cost of Living Incentive Changing the Game for Small Businesses & Entrepreneurs Read more
- Brush Claims Unveils New Brand Identity to Support Strategic Transformation and Advanced Executive Growth Read more
- Mike McGovern on the Trends in Financial Institutions Read more
- Roland Brandli on Adapting to the Recent Changes in Payments Read more