Chancellor Rachel Reeves has confirmed an extension of the inheritance tax (IHT) freeze.
HMRC set to pursue 63,000 people over their estates
HMRC is set to pursue a staggering 63,000 people over their estates, according to figures. The Labour Party Chancellor Rachel Reeves has confirmed an extension of the inheritance tax (IHT) freeze.
Figures from the Office for Budget Responsibility (OBR) show the share of estates liable for IHT will rise from around 5% today to 9.3% by 2030-31 – meaning the number of families paying the 40% death duty will double over the decade.
The OBR forecasts 63,100 estates will be hit by IHT in 2030-31, up from around 32,200 this year. The freeze – now extended until 2031 – is set to raise a record £14.5bn.
READ MORE Warning for UK households buying non-alcoholic drinks at supermarket
Richard Fuller, the Tory shadow chief secretary to the Treasury, said: “Not content with hammering working people, Labour are now coming for those who have worked hard and saved right at the end of their lives, with a stealth increase in inheritance tax that means that the number of estates paying the tax will almost double. Reeves is clearly out of her depth.”
Rachael Griffin, of wealth manager Quilter, said: “Inheritance tax is one of Britain’s most hated taxes.
“What was once a tax on only the wealthiest families will increasingly impact those with even relatively modest estates, who after a decade of frozen thresholds alongside rising house prices will be snagged by the tax.
“Add to that the significant changes coming in April 2027, and the government looks set to cash in on an ever-expanding pool of taxpayers.”
Ian Dyall of Evelyn Partners warned: “Wednesday’s update means another year when protection against inheritance tax will shrink in real terms.
“That should act as a warning shot for all families facing growing inheritance tax liabilities to take steps now so loved ones get to keep more of the family assets.”
Michelle Holgate, financial planning director at RBC Brewin Dolphin, said: “Nearly three-quarters of wealthy individuals have never made a financial gift.
“Too many people wait until death before passing on their assets when it can be far more tax-efficient to gift money while alive – and you get the bonus of seeing loved ones benefit.”