Inheritance Tax (IHT) hit a new record in the last financial year - is it now a mainstream tax on the public?

According to newly released information from HMRC, the total take of IHT for 2022–2023 was £7.1 billion. This is a £1 billion increase above the previous high of £6.1 billion set the previous year, showing how profitable the tax has been for the Treasury.

Inheritance Tax revenue is expected to reach £38 billion over the next five years, according to predictions from the Spring Budget. This means that by 2027–2028, annual receipts will surpass £8 billion, and 6.7% of deaths will result in an IHT charge.

Technical Director at Canada Life, Andrew Tully, commented: "IHT is no longer a tax only on the wealthiest estates," also saying, "As these record figures show, IHT has now become a mainstream tax on ordinary people, largely due to house price increases."

Rachael Griffin, tax and financial planning expert, furthered these sentiments saying, "Historically, IHT was viewed as a tax only for the very wealthy. However, with house prices remaining at such elevated levels while both the nil rate band and residence nil rate band are frozen until 2028, many families that might not consider themselves to be wealthy could find themselves facing an unexpected IHT bill."

She also commented, "The ever-increasing tax revenue from IHT presents a conundrum for the government as we approach election season. Rumours are already rife regarding potential crowd-pleasing policy changes the government might enact to improve their chances of winning the next election. Some reports suggest inheritance tax may be ripe for reform."