In a financial milestone, the UK Treasury has recorded significant revenue from inheritance tax this year.
- Figures from the Office for National Statistics reveal that £736 million was gathered in inheritance tax last month.
- The potential for inheritance tax reforms is on the horizon as the government evaluates ways to increase fiscal revenue.
- Rising asset values have influenced the surge in inheritance tax collections, pushing more estates above the exemption threshold.
- The upcoming Budget may introduce tax reforms that could impact families and businesses nationwide.
In a financial milestone, the UK Treasury has recorded significant revenue from inheritance tax this year. The collection has reached a record £2.2 billion, marking notable growth compared to previous years, indicating a crucial source of government funding amidst rising fiscal demands.
Figures from the Office for National Statistics reveal that £736 million was gathered in inheritance tax last month. This brings the total revenue for the financial year to nearly £4.3 billion, an increase of over 10% compared to the same period last year. The inheritance tax, colloquially known as the ‘death tax’, is levied at a rate of 40% on assets exceeding £325,000.
The potential for inheritance tax reforms is on the horizon as the government evaluates ways to increase fiscal revenue. Rachel Reeves is considering adjustments, including extending the current ‘seven-year rule’ to ten years, which affects the tax-free status of gifts. Additionally, changes like the removal of certain reliefs for AIM shares and exemptions for businesses and agricultural land are being considered.
Rising asset values have influenced the surge in inheritance tax collections, pushing more estates above the exemption threshold. The steady increase in property and financial asset values has contributed to this tax bracket expansion. The FTSE 100’s 12.5% rise and the 2.8% increase in UK house prices within a year have significantly driven this shift.
The upcoming Budget may introduce tax reforms that could impact families and businesses nationwide. The Chancellor is anticipated to propose revisions not just to inheritance tax, but also to capital gains tax and other financial levies to address burgeoning public service costs. While aimed at bolstering the Exchequer, such reforms are likely to meet resistance from affected sectors.
As the UK government braces for its upcoming Budget, all eyes are on potential tax reforms and their economic implications.
