HM Revenue & Customs (HMRC) received £1.5bn in inheritance tax (IHT) receipts between April and June 2021, a 33% increase from the same period in 2020.
The government has commented that higher receipts in 2021 are likely to be due to the pandemic creating more transfers. However, this cannot be verified until full administrative data becomes available.
It should be remembered that both the nil rate band and residence nil rate band have already been frozen until at least April 2026, meaning many families are already receiving increased IHT bills due to rising property and share prices. By considering options such as making gifts whether to individual family members or strategically placed trusts and investing tax-efficiently, there are a number of areas of tax planning that may help reduce or even eliminate an IHT bill.
Overall, government tax receipts during this period were £61.7bn higher than last year with £159bn being received between April and June. A significant chunk of this was due to VAT payments being deferred from 2020 due to the pandemic.
Higher value estates combined with a complete lack of inheritance tax planning is a potent combination, resulting in a healthier tax take for the Treasury.