Inheritance tax is set to raise £66.8 billion for the Government over the next five years, according to an upgraded forecast from the Office for Budget Responsibility.
Following Chancellor Rachel Reeves’ Spring Statement, the OBR released its upgraded estimates.
It forecast that the Government will raise £8.4 billion in IHT in the 2024-25 year, increasing to £9.1 billion in 2025-26, continuing to increase annually before reaching a peak of £14.3 billion in the 2029-30 tax year. The OBR said around £2.5 billion of the rise in 2029-30 is due to the policies announced in Reeves’ Autumn Budget.
Stephen Lowe, director at Just Group, said: “The OBR’s forecasts once more uprated the forecasted inheritance tax take and now estimate that the levy will raise an additional £2.44 billion by the end of the decade.
“Frozen thresholds and rising asset prices have long been increasing the inheritance tax haul and from next month the reforms announced at the Autumn Budget will be accelerating this trend.”
With around one in 10 (9.7%) deaths forecast to incur IHT on the estate by 2029-30, Lowe said “it is clear that the tax is no longer restricted to the very wealthy and is beginning to take a bigger bite of Middle Britain’s wealth.”
He added: “We encourage people to make sure they have an up-to-date valuation of their estate, including a recent assessment of their property wealth, to help them understand if they are likely to incur IHT. Estate planning is complex and professional financial advice can be immensely helpful for people who want to manage their estate efficiently and pass on the maximum inheritance to loved ones.”
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