Plymouth (22/03/22): Inheritance tax receipts reported for April 2021 to February 2022 of ยฃ5.5bn hit a record high.
The receipts surpass the previous record high seen in the 2018/19 tax year of ยฃ5.36bn.
The figure is ยฃ0.7bn higher than the same period a year earlier (April 2020 to February 2021).
HMRC said the record high IHT receipts can be partially attributed to higher volumes of wealth transfers that took place during the peak of the Coronavirus pandemic but said it cannot verify this until full administrative data becomes available.
Martin Brown, Managing Partner at Continuum, said inheritance tax receipts could easily increase again by the end of the tax year even if the number of wealth transfers start to drop.
He said: โWhilst we all hope that the number of wealth transfers will begin to drop as the Coronavirus pandemic enters a less deadly phase, for the remainder of the tax year we are likely to continue to see a high number of transfers.
โThe high volumes of transfers combined with continuing rises in property values and more estates becoming liable to inheritance tax due to the freeze of IHT thresholds means we are very likely to see IHT receipts hit even bigger highs before the end of the tax year.
โAs IHT receipts rise it shows how it is more important than ever for those hoping to pass on assets after they die to consult a good financial adviser.
โAt Continuum we are pleased to see an increased awareness amongst clients to begin planning for wealth transfer earlier in their financial planning process. In addition to this, we have seen a real appetite from clients to get other family members involved.
โWe always encourage clients to include younger generations of their family in meetings to talk about estate planning and intergenerational wealth transfer. However, in the past two years we have seen a notable increase in the number of clients including their family in discussions with their Continuum adviser.
โThe Coronavirus pandemic has left clients thinking about their vulnerability and perhaps also a little more open to discussing estate planning with their family.โ
A recent Freedom of Information request to HMRC by Continuum revealed that UK residential property now makes up well over a third of the value of assets held by estates being assessed for IHT.
In the 2018/19 tax year, tax paying estatesโ estimates of assets included 9,540m UK residential properties valued at ยฃ5,300m. Total assets of the estates (before liabilities) for the period were ยฃ14,100m, therefore residential property made up for over a third of all estimated assets.
HMRC told Continuum further analysis will break down any more recent IHT receipts data by asset class.
The latest inheritance tax data can be found in full on the UK Government website HMRC tax receipts and National Insurance contributions for the UK (Monthly Bulletin) - GOV.UK (www.gov.uk)
Editors Notes - About Continuum
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