HMRC have published their latest statistics on Inheritance Tax (IHT), showing that receipts reached record levels in 2022-23. This was despite less than 5% of estates paying IHT, and the value of Agricultural Property Relief (APR) and Business Property Relief (BPR) claims increasing by 24% and 17% respectively.
Newly published data shows that Inheritance Tax (IHT) liabilities in 2022-23 stood at £6.7 billion, an increase of £710 million on 2021-22.
- This is largely attributable to rises in asset values and the frozen Nil Rate Band (NRB) and Residence Nil Rate Band (RNRB), which are due to remain at 2021-22 levels until 5 April 2030.
- The previous peak of £5.99 billion was reached in the 2021-22 year.
The estates of those aged between 75 and 84 accounted for 27% of the total tax liability, with estates of those aged over 85 making up 55%.
- Taxpaying male-owned estates had an overall tax liability of £3.23bn, whereas taxpaying female-owned estates had a higher overall tax liability of £3.47bn.
In 2022-23, IHT was payable on fewer than 1 in 20 estates, with 4.62% of UK deaths resulting in a charge. In total, there were 31,500 taxpaying IHT estates, representing a 3,700 (13%) increase from 2021-22.
- The average amount of IHT paid across all taxpaying estates decreased slightly by 1.4% between 2021-22 and 2022-23, standing at £212,000.
Despite the headline marginal rate of IHT being 40%, the average effective tax rate was much lower at 13% for 2022-23. Exemptions and reliefs played a big part in this:
|
Used by No. of estates |
Value 2022-23 |
Value 2021-22 |
|
|
Spouse/civil partner exemption |
5,070 |
£5.98bn |
£15.5bn* |
|
1,730 |
£1.9bn |
£1.53bn |
|
|
3,840 |
£3.34bn |
£2.85bn |
|
|
Exemption for transfers to qualifying charities and registered clubs |
10,800 |
£1.92bn** |
£2.07bn |
|
30,600 |
£7.72bn |
£6.51bn |
*not comparable to 2022-23 due to a change in reporting requirements for certain non-taxpaying estates from 1 January 2022.
** fall partially due to the change in reporting requirements for excepted estates between 2021-22 and 2022-23.
Useful guides on this topic
IHT: Estate planning checklist
This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT).
Client Briefing: Making gifts & IHT
What gifts can you make without triggering Inheritance Tax (IHT)? What are the rules on making tax-effective gifts for IHT purposes?
IHT: Transfers of value
What is a transfer of value for Inheritance Tax (IHT) purposes?
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