Chancellor Jeremy Hunt has left inheritance tax untouched in the Autumn Statement in favour of cutting National Insurance and business tax cuts.
Hunt had been under considerable pressure from some backbench MPs to cut inheritance tax, which is charged at 40% on an estate’s value above £325,000, or £500,000 if it is passed to a direct descendant.
It is paid by very few people, applying to just 4% of deaths between 2020 and 2021.
There had been widespread speculation that the chancellor could cut the rate paid above the threshold, with some sources suggesting it could be halved to 20%t.
However, he has held off this decision – until the Spring Budget at least.
Our sister publication Money Marketing reported yesterday (21 October) that the government is on course to collect record Inheritance Tax (IHT) receipts for the third year in a row.
HMRC’s latest update show that £4.6bn was collected through the first seven months of the 2023/24 financial year (April to October).
This is a 12% increase on the £4.1bn collected in the first seven months of 2022.
It is estimated that at the current rate of tax collection, IHT will raise over £7.8bn for the Treasury – £700m more than last year’s all-time high of £7.1bn.
