Inheritance Tax: The Taxman’s Latest Rake‑out
HM Revenue & Customs just dropped the latest figures, and guess what? The inheritance tax pot is brimming—£7.5 billion from March 2023 to April 2024, the highest ever collected. That’s a tidy £400 million bump from the same window last year, and it keeps the upward trend alive over the past twenty years.
Where All the Money’s Going
- Current burden: About 4% of estates bite the tax bite.
- Future outlook: The Institute for Fiscal Studies predicts the slice of those dying with IHT due will rise to over 7% by 2032‑33.
- One‑in‑Eight: By that time, roughly 12.5% of people will find themselves side‑by‑side with the taxman, either on their own or their spouse/civil partner’s passing.
Picking Up the “Death Tax” Tab
Wealth Club’s latest data shows the average bill is set to climb to £243,000 for the 2023/24 tax year. That’s a 13.3% surge from just three years ago, when the average stood at £214,000. And the number of estates paying turns up by nearly 16%. Roughly 31,000 families will need to hand over a slice of their inheritance.
“It may only be a small minority of taxpayers who hit the cliff,” says Nicholas Hyett, Investment Manager at Wealth Club, “but for those who do, the bills are eye‑watering.” He cautions that rising house prices and frozen thresholds mean even families with a decent lifestyle can accidentally stumble into the dreaded tax territory.
Will The Tax Vanish?
In the last six months, citizens and politicians alike have been pleading: abolish it, or at least throw some radical reforms in the mix. Look at Sweden, Australia—these countries have seen a drop in businesses moving overseas and a rise in affluent folks choosing to settle down after repealing inheritance tax. Politicians might even get a grin from voters.
What You Can Do Instead
Spot on, it’s not all doom and gloom. Laid-back ways still exist for UK residents to pass on wealth without the tax handcuffs. Talk to a financial adviser, explore trusts, or set up a lifetime gift setting. Every bit helps keep the taxman’s pocket from filling.
So while the numbers are skyrocketing—almost as if the taxman’s waiting for a big party—there are still plenty of legitimate, tax‑friendly routes to safeguard your legacy.
