Explore the latest insights into Inheritance Tax (IHT) from HM Revenue & Customs (HMRC) on DIYProbateForms.co.uk.
According to HMRC data, IHT receipts between April 2023 and February 2024 reached an impressive £6.8 billion, marking a notable increase of £0.4 billion compared to the previous year.
Forecasts indicate a record-breaking year for the Treasury, with projected receipts of around £7.54 billion for the 2023/24 tax year, a significant 6.25% rise from the previous period. This surge follows the all-time high of £7.1 billion in 2022/23, indicating a consistent upward trend in IHT receipts.
The fluctuations in receipts, including lower figures in April and May 2020 due to COVID-19-related challenges, and subsequent peaks, reflect various factors influencing IHT payments. Recent trends indicate increased wealth transfers following IHT-liable deaths, rises in asset values, and government decisions maintaining tax-free thresholds at certain levels until 2027 to 2028.
Analysis of the data highlights several spikes in receipts, notably in June 2022, November 2022, June 2023, and October 2023, attributed to higher-value payments than usual.
Laura Hayward, Tax Partner at Evelyn Partners, emphasizes the growing importance of understanding and planning for Inheritance Tax. As substantial wealth transfer looms in the future, households face potential increases in IHT liabilities. With freezing nil-rate band allowances and rising asset values, more estates are surpassing the IHT threshold, necessitating strategic planning to mitigate tax burdens.
As the tax year end has now been and gone, opportunities exist to leverage annual gifting allowances, offering a straightforward method to reduce IHT liability. Additionally, maximizing contributions to defined contribution pension pots presents another avenue for tax-efficient wealth management.
Stay informed and proactive in managing your IHT obligations. For further details and advice, explore our resources and guidance on DIY Probate Forms.
Are you looking for help completing the IHT400 form or IHT205? Give DIY Probate a call on 0116 2795044, and we’ll gladly help.