Figures out immediately present that HMRC raked in one other £2.4 billion in inheritance tax receipts within the three months to July 2022. That is £300 million greater than in the identical interval final 12 months.
Liz Truss and Rishi Sunak have each advised they’d evaluation inheritance tax guidelines as Prime Minister. This might imply scrapping this most hated of taxes altogether, reducing the 40% charge, rising the brink which has been frozen since 2010 at £325,000, or making extra property exempt, reminiscent of ISAs. Alternatively they might introduce an American-style property tax, which in its easiest kind is successfully a cap on the quantity that anybody can provide away of their lifetime and every year, tax free.
Alex Davies, CEO and Founding father of Wealth Membership stated: “Inheritance tax reform is a possible vote winner for Rishi Sunak and Liz Truss amongst Conservative occasion members, however it’s onerous to think about it is going to be high of their agenda in any emergency Finances as soon as they step into energy. Slicing inheritance tax will do nothing to ease the price of dwelling disaster engulfing the nation, and it’s an actual money cow for the Treasury too. IHT generates round £800 million in tax income every month, a really significant sum at a time when 29 million households are being given £400 every to offset vitality payments.
The rise within the month-to-month IHT take is being pushed by hovering home costs and years of frozen allowances. With rampant inflation, the impact of freezing allowances will solely improve within the years forward until the brand new Prime Minister chooses to intervene. Whereas simply 4% of estates pay inheritance tax for the time being, with out some evaluation of the foundations, increasingly more households are going to search out themselves hit by dying duties they won’t have anticipated.”