Inheritance Tax Boosted by Property Price Boom
Annual receipts and receipts as a proportion of gross domestic product since the tax year 2002 to 2003 are shown in below.Is your IHT Planning up to speed? We know people who can help!
Annual receipts and receipts as a proportion of GDP
The data shows:
- over the last 20 years, receipts as a proportion of gross domestic product (GDP) have generally followed cash receipts
- the gradual increase in receipts from 2002 to 2003, through, 2007 to 2008 is due to increases in the value of tax-liable assets in this period, particularly residential property
- due to both the introduction of the Transferable Nil Rate Band for deaths occurring from October 2007 and a fall in the value of most asset classes, receipts fell sharply in the second half of 2008 and in most of 2009
- since 2010 to 2011, receipts have increased both in terms of annual revenue and as a proportion of GDP
- the slight fall in receipts in 2019 to 2020 is most likely due to the introduction of the Residence Nil Rate Band threshold, which had been introduced in stages since 2017 to 2018
- receipts in 2019 to 2020 were also affected by the Ministry of Justice’s announcement of an increase in probate fees from April 2019 (subsequently cancelled) which caused some executors to bring forward their tax payments (into 2018 to 2019) to avoid the prospective higher fees
- receipts increased in 2020 to 2021 compared to the previous year (although remained slightly below 2018 to 2019 levels), and this increase is likely in part due to the higher number of wealth transfers that took place during this tax year, itself the result of higher-than-usual deaths due to the effect of Covid-19 pandemic
- receipts increased further in the latest tax year to £6.1 billion, likely due to a combination of the ongoing effects of the Covid-19 pandemic, recent rises in asset values and the government’s decision, in March 2021, to maintain the IHT nil rate band thresholds at their 2020 to 2021 levels up to and including 2025 to 2026