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Stamp Duty revenue slumps but IHT soars - new figures

Inheritance Tax receipts for April to September 2023 have soared to £3.9 billion, some £0.4 billion higher than the same period last year.

IHT is being pushed higher by a combination of frozen tax thresholds and increased interest on late payments; a slowing housing market, and probate delays, mean you may incur these late payments as it takes longer to sell a home to pay an IHT liability.

Meanwhile stamp tax receipts for April to September are £7.7 billion, which is £3.0 billion lower than the same period last year.


“HMRC remains on course for another record year for IHT, as receipts continue to soar skyward. It’s a heady mixture of tax thresholds that have been frozen for years which drag an ever-increasing number of families into paying it. Added to this, a recent increase in interest rates on late payments are pushing up what could already be a large bill. It’s a complex area that really contributes to IHT’s reputation as the nation’s most hated tax” says Helen Morrissey, head of retirement analysis at Hargreaves Lansdown.

Under the current rules, you must pay inheritance by the end of the sixth month after the person has died. After this point you will be charged interest on any outstanding amount. 

For many people the unwinding of a deceased person’s estate takes longer than six months particularly if you have to sell a property to settle the bill - this cannot start until you get probate, typically taking the process over six months. 

Morrissey adds: “Current property market woes may mean it is taking longer to sell, but cooling house prices may also have the effect of taking some families out of the inheritance tax trap. Soaring house prices in recent years have contributed to many people, often unexpectedly, incurring an IHT bill, so there’s a chance that as prices come off the boil, properties that pushed estates just over the threshold may now come under it.

“Stamp tax receipts were down significantly on the same period last year as the housing market slows. It’s also affected by the fact that the stamp duty thresholds were hiked on September 23 last year. This change will fall out of the figures next month, but with the cost-of-living crisis continuing to keep a firm grip on our finances and current high mortgage rates showing little sign of budging, we may not see any significant improvement any time soon.”


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