Inheritance Tax on the Rise!

By Michael Court, Tax Consultant, McEwan Wallace

The Office of Budget Responsibility (“OBR”) have published forecasts up to the year 2030-31 which show a marked increase in Inheritance Tax (“IHT”) receipts.

In the most recent figures for 2024-25 total IHT receipts were £8.3bn, representing around 0.3 per cent of GDP. This is set to raise to £14.7bn by 2030-31 (around 0.4 per cent of GDP). This still pales in comparison to income tax (£305bn in 2024-25) but it illustrates that IHT receipts are going up, which would be hard for whichever Party who is in Parliament to replace.

The OBR state that the growth is driven by the frozen thresholds, which have not moved since 2009. The October 2024 Budget changes to pension pots, agricultural and business property relief account for around 14 per cent of total revenue by the end of the forecast.

It is therefore more important than ever to understand your current IHT exposure and what options you have available to you to perhaps mitigate any exposure.