30th
Aug 2022
HMRC’s latest figures released shows yet another ‘windfall’ increase in taxation receipts from property owners and landlords.
Stamp duty receipts continues to skyrocket with £7bn between April and July this year, an increase of £1.3bn over the same period last year.
The recently released figures shows that the HMRC grabbed another £2.4bn from inheritance tax receipts during April to June from property value in the main but not exclusively - £300 million higher than the corresponding period last year.
One out of 25 estates pays inheritance tax, however the freeze on inheritance tax thresholds along with decades of spiralling house price increases and inflation guarantees rising receipts. The business consultancy Wealth Club estimated that the average bill could rise above £266,000 this tax year, 27 per cent higher than in 2019.
The main threshold is the nil-rate band, allowing up to £325,000 of an estate to be passed on without having to pay any Inheritance Tax which has remained unchanged since April 2009.
Over the past quarter (April to July) HMRC has also raked in extra N.I. and income tax receipts up by £17.6bn because of 874,000 more employees, the onerous National Insurance increase and the July deadline for self-assessment.
Helen Morrissey, an analyst at a business consultancy, says: “High employment, a strong housing market and burgeoning holiday demand means HMRC’s tax take keeps on rising. The burgeoning cost-of-living crisis has not dampened our demand for property with stamp duty receipts continuing to soar. This is reflective of lower tax rates being in play last year as the stamp duty holiday was in force.”
A spokesperson for the Wealth Club, comments: “Inheritance tax reform is a potential vote winner for Rishi Sunak and Liz Truss among Conservative party members, but it’s hard to imagine it will be top of their agenda in any emergency Budget once they step into power.
“Cutting inheritance tax will do nothing to ease the cost of living crisis engulfing the country, and it’s a real cash cow for the Treasury too. IHT generates around £800m in tax revenue each month, a very meaningful sum at a time when 29m households are being given £400 each to offset energy bills.
“The increase in the monthly IHT take is being driven by soaring house prices and years of frozen allowances. With rampant inflation, the effect of freezing allowances will only increase in the years ahead unless the new Prime Minister chooses to intervene. While just four per cent of estates pay inheritance tax at the moment, without some review of the rules, more and more families are going to find themselves hit by death duties they might not have expected.”
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