Inheritance Tax Revenue Expected to Increase Over 6% After Election

Inheritance Tax Hits a New High—And Politicians Are Getting a Leg Up

Morning news alert: HM Revenue & Customs (HMRC) just released the latest figures and the headline is bright and alarming: inheritance tax cash‑flow in the first two months of the 2024/25 civil year hit a tidy £1.4 billion.

That’s a £200 million jump from the same period last year, and it keeps the steady climb that has been going strong for the last twenty years. The tax that moans about being the UK’s “most hated” is making more money every time the economy decides to tick higher.

Where Does It All Come From?

In 2023/24, inheritance tax netted HMRC a whopping £7.499 billion.
Political promises could add a hefty bump: Labour’s plan to clamp down on non‑resident “non-doms” shifting money offshore could generate an extra £430 million a year—a 6% lift on the total.
And the thresholds that cap what counts as a “taxable” estate are likely to stay frozen.

So, if you’re a voter, your wallet might feel a little heavier—especially if you run into the brackets.

Election‑Season Manifestos on Inheritance Tax

Labour: Crack down on offshore trusts and drag in a projected £430 million yearly.
Reform: Drop IT on all estates under £2 million, leaving just 2% of homes in the net‑tax zone. The top rate would stay at 20% but with a charity‑donation stash.
Conservative: Keep the tax‑light for family farms so the legacy can stay inside the farm paddocks.

All roads seem to lead to a higher tax bill—whether you’re in the eye of the Labour storm, Reform’s tidy‑up corner, or the Conservative’s family‑farm safe‑haven.

Expert Take: Nicholas Hyett on the Reality Under Each Party

“Inheritance tax is a hot‑button issue this election,” says Nicholas Hyett, Investment Manager at Wealth Club.

He notes that while suddenly chasing off offshore non‑doms appears shiny, the bulk of the tax load will still hit ordinary families. “The inflation bite might even reverse some households’ living standard, but because allowances have stalled, the government warns these groups are now “wealthy enough” to head into the tax realm.”

Hyett warns, “heads-up, families who’ve been living the dream of passing down homes, will find the tax hit harder than expected.”

Mitigation Ideas (Some Practical Tips)

Gift qualifying amounts while alive—free you from that future bill.
Pass pensions tax‑free – the loophole is still a thing.
Invest in certain AIM shares, or the smart EIS/SEIS baskets, to shield your capital.

But the political landscape feels like a football field—full of unpredictable passes. With inheritance tax as a game‑changer, making a clear, informed decision about your estate plans has turned into a gamble. Uncertainty? It’s the opponent’s best friend, and opponents of growth everywhere are pleased with that equity.