HMRC nets record £5.3bn in inheritance tax

HMRC collected a record £5.3bn in inheritance tax in the year to February 2018, according to private client law firm Wilsons.

The revenue authority’s inheritance tax take increased by 13% compared to the £4.7 billion collected in 2016/17. Wilsons said that the IHT freeze at £325,000 has meant that more families are being subject to tax bills on their inheritance following several years of residential property price inflation.

Torsten White, partner at Wilsons, said: “Substantial portions of individuals’ wealth is now being taken by HMRC through IHT. The value of that IHT, somewhat worryingly, continues to rise at an alarming rate.

“No one wants their children or other dependents to have to pick up hefty inheritance tax bills, so it is important to plan ahead as early as possible how to pass wealth on to children and grandchildren.

“With the residence nil rate band increasing just £25,000 next year, and the slowdown we are seeing in inflation, it will be interesting to see whether tax take from IHT starts to level off in coming years.”

Inheritance tax revenue has seen a rapid climb in recent years. HMRC collected £3.5bn in 2013-14, rising to £3.8bn in 2014-15 and jumping to £4.6bn in 2015-16 ahead of the increases in the past two years.