Inheritance tax hits record high of £7.1bn, as homeowners hit by Government grab

Research by peer-to-peer real estate investment platform, easyMoney, has shown that the level of inheritance tax paid to HMRC has, as previously predicted, climbed to its highest level since the turn of the Millenium, hitting almost £7.1bn in 2022/23.

easyMoney analysed the level of inheritance tax paid across the UK since 1999 and found that to date, a huge £89.8bn has been paid by those passing on their accumulated money and assets to loved ones.

Previous analysis by easyMoney highlighted how the level of inheritance tax paid had climbed by a notable 13.7% in 2021/22 to £6.054bn, as the aftermath of the pandemic coupled with record high house prices drove the fourth highest annual increase seen since the turn of the Millennium.

At the time, easyMoney also forecast that total inheritance tax paid could hit £7.1bn during the 2022/23 financial year and the latest figures show they were right.

Inheritance tax paid in 2022/23 totalled 7.087bn an annual change of 17.1%. This marks the highest year on year jump since 1999 with the exception of just one year, 2015/16, when the annual increase stood at 22.2%.

What’s more, inheritance tax receipts as a proportion of all HMRC tax receipts sat at 0.9%. Again, this is the second highest proportion of tax receipts accounted for by inheritance tax since 1999, with the exception of one year – 2020/21.

Jason Ferrando, CEO of easyMoney says:

“The Government has become rather good at profiting from a consistently strong housing market by taxing homeowners on their ability to climb the ladder, whether it be via the initial hit of stamp duty, or on the capital appreciation gained over the course of their lives.

In fact, where the latter is concerned, HMRC have just profited to the tune of over seven billion pounds as the level of inheritance tax paid on our bricks and mortar assets has reached yet another record high.

While there still may be a degree of pandemic influence at play, the main contributing factor is the fact that house prices have climbed to dizzying heights and largely remained there, despite market conditions cooling in recent months.

So unfortunately, it seems as though the Government will continue to line its pockets at the expense of homeowners, as the market continues to stand firm.

However there is some good news, a financial adviser will be able to point you in the right direction for your circumstances”