HM Treasury is set to receive a whopping £37bn ($49bn, €44bn) in inheritance tax (IHT) payments over the next five years, according to estimates from the Office for Budget Responsibility (OBR).
The OBR forecast expects intakes of:
- £6.7bn in 2022-23;
- £6.9bn in 2023-24;
- £7.3bn in 2024-25;
- £7.8bn in 2025-26; and
- £8.1bn in 2026-27.
In comparison, IHT bills raised £4.8bn five years ago, meaning that the UK government is on track to nearly double the annual sum collected by 2027.
The total raised from IHT payments in the last five years amounted to £27bn, which could lead to families forking out 36% more on their assets and estates when a family member dies in the next half a decade.
Sean McCann, financial planner at NFU Mutual, has attributed the ever-increasing sum to “rocketing house prices and inflationary increases on the value of assets”.
This means that IHT paid by UK families over the next five years “is expected to be almost £10bn higher than the previous five”, he added.
“The chancellor’s decision to freeze the tax-free allowances for inheritance tax until 2026 means more families will be caught in the IHT net in the coming years.”
