Inheritance tax: Record number now liable for levy as warning over future issued

The change is almost double the number coughing up cash for the death duty in 2018/19, figures from His Majesty’s Revenue & Customs have shown.

The Treasury has been raking in extra cash from inheritance tax as the so-called “nil-rate” band has been frozen until 2028.

Chancellor Jeremy Hunt extended the freeze until 2028 in last year’s autumn statement in an attempt to rebalance the books following Kwasi Kwarteng’s mini-budget.

Data released earlier this week revealed death levy receipts reached an all-time high of £7.1billion.

The previous high was recorded in 2021/22 when £6.1billion was raised.

Warning of even more increases, David Gibb, a chartered financial planner at Quilter, said: “It is likely we are going to see more record breaking numbers in the years to come.

“The consistent rise in house prices has also exacerbated this problem ultimately resulting in more individuals being ensnared by the IHT net.”

He added: “Many individuals who were once considered ‘middle class’ are now finding themselves liable for inheritance tax, which was typically seen as a tax for the wealthy, simply due to the appreciation of their properties' values.”

There is a 40 per cent band rate on assets valued above the £325,000 threshold.

An opinion poll by YouGov revealed a plurality of Britons oppose inheritance tax.

The survey showed 49 per cent thought inheritance tax was unfair or very unfair.

In comparison, just 21 per cent claimed it was fair or very fair.

The Treasury recently said: “The vast majority of estates do not pay inheritance tax - more than 93 per cent of estates are forecast to have zero inheritance tax liability in the coming years.”

The latest statistics from Whitehall revealed just four per cent of deaths in the UK resulted in the paying of inheritance tax.