HM Revenue and Customs collected £3.9bn in inheritance tax from April to September 2023, which is £400mn higher than the same period last year.
HMRC stated that recent interest rate rises may have encouraged the personal representatives of some estates to pay any tax duty sooner than they otherwise would have done.
However, it said that it is not able to confirm this until full administrative information becomes available.
It added that this recent increase follows on from June 2023, in which the highest monthly total of IHT receipts were recorded.
Quilter chartered financial planner, Rosie Hooper, commented: “This shines a light on why both political parties are currently making IHT a battleground policy in the run up to an election next year.
“This increasing revenue causes a conundrum for the government as IHT is an emotive tax that can split voters.
“Labour is rumoured to be looking at removing Business and Agricultural Property relief but by doing so they risk having a huge impact on the AIM market and damaging investment into UK plc.”
Other receipts
The increase in inheritance tax contributed to total HMRC receipts for the six month period ending September 2023 being £23.1bn higher than the same period last year, standing at £392.5bn.
However, inheritance tax was not the only driver of this increase in total receipts with a similar rise being recorded for income tax, capital gains tax and national insurance contributions.
The receipts for these taxes were reported to be £216.8bn, an increase of £11.5bn compared to the same period last year.
A similar rise was reported from PAYE income tax and NIC1 receipts for the time period, increasing to £201.2bn, a rise of £10.8bn.
Hooper added: “The latest figures show receipts from PAYE income tax and national insurance payments for April to September 2023 were £201.2bn which is £10.8bn higher than the same period a year earlier.”
She additionally predicted that, given the threshold for the additional rate of income tax has been reduced from £150,000 to £125,140, “we can expect further rises in coming months”.
Decreased receipts
However, not all receipts were found to have increased in HMRC’s latest data as stamp taxes and annual tax enveloped dwellings fell.
Overall receipts for stamp taxes and ATED were found to have decreased by £3bn compared than the same period last year, falling to £7.7bn.
HMRC explained that much of this change relates to stamp duty land tax, driven by lower transaction numbers, the lower rate of taxation and a more generous relief for first time buyers introduced in September 2022.
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
