New figures published by HM Revenue and Customs (HMRC), show inheritance tax receipts hit £5bn in the seven months from April to October 2024.
This is £0.5bn higher than the same period in the previous tax year and continues the upward trajectory over the last two decades. The last full tax year for inheritance tax raised £7.5bn and currently just one in 20 estates is liable.
However, in the Autumn Budget the Chancellor announced:
- An extension to the freeze on IHT thresholds, which have been frozen for a further two years (until 2030).
- Agricultural Relief and Business Property Relief have been reformed, meaning that from April 2026, the first £1m of qualifying combined assets will have no inheritance tax at all, but for assets overt £1m a 50% relief will apply, at an effective rate of 20%.
- Qualifying AIM shares will no longer have full exemption from IHT, instead from 2026 they will have an inheritance tax rate of 20% if they are held for two years.
- From 6 April 2027, inherited pensions could be subject to inheritance tax in addition to income tax levied on the recipient meaning passed down pensions could be taxed at an effective rate of up to 67% - subject to consultation.
