Inheritance tax receipts reached £2.1 billion from April to June in the 2024/25 tax year. This represents an £83 million increase from the same period last year.
The continued rise in inheritance tax has sparked political debates, particularly around the Labour Party’s approach and potential reforms which could impact family businesses.
Steady Climb of Inheritance Tax
Figures from HM Revenue and Customs (HMRC) show a substantial rise in inheritance tax receipts. This trend has continued for two decades, with the previous full tax year seeing a total of £7.499 billion in inheritance tax revenue.
Labour Party’s Tax Stance
Nicholas Hyett, Investment Manager at Wealth Club, stated, ‘Inheritance tax remains a political hot potato.’ Despite promises not to raise certain taxes, the need to meet spending pledges keeps inheritance tax in focus.
Potential Reforms and Their Impacts
Reliefs for the AIM market, Enterprise Investment Scheme, and Seed Enterprise Investment Scheme are crucial. They provide vital funding for smaller companies in Britain, making their preservation important.
Wealth Club Survey Insights
The survey’s findings highlight the delicate balance politicians must strike in tax policy to meet public expectations and fiscal requirements.
Political Pressure and Economic Needs
The government faces the challenge of raising necessary funds without causing undue harm to businesses and families.
Future of Inheritance Tax
How inheritance tax evolves will depend largely on the outcomes of these ongoing discussions and the government’s fiscal strategies.
Key Considerations for Reform
It is crucial to preserve reliefs that support smaller companies and stimulate economic growth.
Inheritance tax receipts continue to rise, driven by both economic needs and political pressures.
Future reforms must balance revenue generation with the protection of family businesses and economic growth.