The 9.7% increase from £3.1bn in the 2012-13 tax year was accompanied by figures published today on the HM Revenue & Customs website which showed a slight increase in the number of UK tax paying estates passing on death in 2011-12, to 16,000.
Independent experts warned that there is not enough attention given to IHT planning by potential clients of IFAs and some of the future political scenarios advisers may have to face.
Frank Strachan, Edwin Coe tax partner, said he was not surprised in the least that IHT receipts are up.
“Even modest estates are now subject to IHT. Any amendment to the nil rate band will be a hot topic for any political party as any movement, up or down, will effect voters and therefore votes.
"For example, should a party wish to increase the nil rate band, it will be an easy target for those who don’t believe in the ‘we are all in it together’ sound bite; whereas should a party wish to decrease the nil rate band, then there will be further uproar that even more estates are caught in the IHT net. It is a double edged sword and one which I expect all parties to try and avoid committing too one way or the other. It is most definitively a political hot potato.”
Neil Chadwick, technical manager at RL360°, said there were still far too many people who did not undertake the necessary basic steps to minimise their exposure to UK inheritance tax.
“Planning for death isn’t a particularly pleasant thing to have to consider but it’s something that has to be done to ensure that as much of your personal wealth is passed on to your family/intended beneficiaries as opposed to it funding diamond encrusted backscratchers for the government.
“IHT is one of the least popular taxes and quite a few countries around the world are getting rid of it however, it’s also one of the biggest money spinners for the government and for that reason I can’t see any successful party post 2015 elections looking to get rid of it in a hurry.”
Richard Watkins, certified financial planner at Close Brothers Asset Management, said the latest inheritance tax receipts showed a worrying trend.
“It appears the only way is up for inheritance tax receipts as they continue to rise year-in, year-out. While a relatively small number of people contribute large sums in inheritance tax, the number affected will continue to grow in leaps and bounds if the current trend continues, unless the government brings inheritance tax in line with increases elsewhere in the British economy.”
