HMRC remains on course for another record year for inheritance tax, as receipts continue to soar which could give the Conservatives a further electoral headache.
The Tories, reeling from the loss of two true blue seats in Tamworth and Mid-Bedfordshire, are reportedly hoping to reform the tax in a bid to shore up flagging voter interest.
But with government finances under pressure, this may no longer be an option for Chancellor, Jeremy Hunt.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown noted inheritance tax receipts for April 2023 to September 2023 are £3.9 billion, which is £0.4 billion higher than the same period last year.
She pointed out receipts have been boosted by “a heady mixture of tax thresholds that have been frozen for years which drag an ever-increasing number of families into paying it,” together with a recent increase in interest rates on late payments.
“It’s a complex area that really contributes to IHT’s reputation as the nation’s most hated tax,” she added.
She said cooling house prices might take some families out of the inheritance tax trap, noting soaring house prices in recent years have contributed to many people, often unexpectedly, incurring an IHT bill.
“There’s a chance that as prices come off the boil, properties that pushed estates just over the threshold may now come under it,” she explained.