IHT receipts show year-on-rise - Smith & Williamson comment

New HMRC data out today shows that IHT receipts for April 2021 to January 2022 were £5 billion - £0.7 billion higher than the same period a year earlier.

Julia Rosenbloom, tax partner at Smith & Williamson, part of wealth management and professional services group Tilney Smith & Williamson, commented: “The latest update on IHT collections represents a decent uplift for the Treasury which is under pressure to fund the government’s ambitious reform agenda and help families with the cost of living crisis.

“The Chancellor’s next Budget could bring in changes to personal taxes that may affect the feasibility of families passing wealth to the next generation and, accordingly, the level of IHT payable. While we wait for confirmation as to when the next Budget will actually take place, it’s important for families to think carefully about their tax planning and take professional advice to ensure they use their current allowances before any possible changes are introduced.

“Even if no direct changes are made to IHT in the next Budget, many families can still expect to see increased IHT bills in the coming years given both the nil rate band and residence nil rate band have been frozen until at least April 2026. This is bringing more estates into scope on the back of rising property values in particular. By planning ahead, there are a number of areas where an IHT bill could be reduced or eliminated. For example, families could consider investing tax-efficiently and making gifts to family members.”