According to data revealed, HMRC collected £7.1bn ($8.9bn) from inheritance tax numbers from April 2022 to February 2023. This continues the current upward trend and is £1bn higher than in the same period last year.

As a result of years of rising house prices, notably in the South East, rising inflation, and tax freezes, an increasing number of families who would not consider themselves wealthy have crossed the inheritance tax threshold.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

A number of ministers have hinted in recent weeks that raising the threshold, which is currently £325,000, or cutting the tax rate is in the works in order to secure support for their candidates in the general election. 

Based to the latest predictions issued by the Office for Budget Responsibility last week, IHT receipts might reach £7.2bn this tax year, accounting for 0.7% of total receipts and 0.3% of national income.

Alex Davies, CEO and founder of Wealth Club said: “The revenue generated from inheritance tax plays an important part in the government’s spending programme and so it will be interesting to see if Rishi Sunak will opt to change this in a bid to win popularity in the upcoming polls. With a deficit of £125bn which is equivalent to £1,870 per head of the UK’s population, it could be an expensive tactic.

“No one likes to pay more tax than they need to, but the good news is that with a little bit of planning, there are a number of perfectly legitimate ways to reduce your liability. One of the great IHT threats arguably comes from where you least expect it: your ISA. Whilst tax efficient in so many other ways, ISAs form part of a person’s taxable estate along with other savings, investments, and possessions, so up to 40% of could be eaten up by inheritance tax rather than passed to your loved ones.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“An alternative option is to invest in certain AIM shares within your ISA. Many AIM shares qualify for something called Business Property Relief. Providing you hold them on death and have been invested for at least two years they should be free of inheritance tax. You can choose the investments yourself or opt for the hassle-free approach of a professionally managed portfolio.”