According to the latest government data the receipts for Inheritance Tax (IHT) from April 2022 to February 2023 amounted to £6.4bn, which is a £0.9bn increase from the same period in the previous year.
Record breaking inheritance tax receipts
According to the latest government data the receipts for Inheritance Tax (IHT) from April 2022 to February 2023 amounted to £6.4bn, which is a £0.9bn increase from the same period in the previous year. HM Revenue & Customs (HMRC) statistics revealed that the total receipts for February 2023 were £531m, contributing to the total tax take for the current year. This amount has already surpassed the total amount received by the Treasury in the entire 2021/22 financial year, with a £353m difference.
In addition, the Office for Budget Responsibility (OBR) predicts a substantial increase in the nation’s total Inheritance Tax (IHT) bill over the next six years, resulting in an additional £3bn in the Treasury’s coffers.
What can you do?
- Creating a Will*, or updating an existing one, is the simplest and most efficient method to communicate how you want your wealth to be distributed after your passing. Without a will, your assets will be distributed on your behalf, and you may be subjected to Inheritance Tax (IHT) that could have been prevented.
- Utilising your annual gifting allowance is an effective method of reducing Inheritance Tax (IHT) bills. You have the option to gift up to £3,000 per tax year (£6,000 for a couple), which will not be considered as part of your estate for IHT purposes. Additionally, if your gifting allowance from the previous year was unused, you can use it in the current year. This means that a couple could potentially remove £12,000 from their estate in this tax year.
- Pensions serve as an excellent retirement saving option and can also function as a valuable estate-planning tool. Irrespective of when you pass away, the funds you accumulate in your pension plan will not be considered part of your estate and thus, will not be subject to Inheritance Tax (IHT).
There was some good news in the Spring Budget with the announcement of the removal of the lifetime allowance for pensions, individuals with wealth can benefit from increased Inheritance Tax (IHT) breaks for passing down their assets to the next generation. This is because pensions are generally excluded from IHT
The value of a pension with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
*Will writing involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills are not regulated by the Financial Conduct Authority
To receive a complimentary guide covering wealth management, retirement planning or Inheritance Tax planning, contact Simon Cull on 07738202324 or email email@example.com
Crown Wealth Consultants is a trading name of Crown Wealth Ltd.
 HMRC Monthly Bulletin 21/3/2023, HMRC tax receipts and National Insurance contributions for the UK (monthly bulletin) – GOV.UK (www.gov.uk)
 Office for Budget Responsibility, Economic & Fiscal Outlook, November 2022, IHT tax take forecast to increase by £3bn in ‘substantial’ rise (professionaladviser.com)