Stamp duty continues to soar, reaching £7 billion between April and July 2022 – an increase of £1.3 billion on the same period in the previous year.
Meanwhile figures released over the weekend show HMRC raked in another £2.4 billion in inheritance tax receipts in the three months to July 2022. This is likely to have come from property value mainly, although not exclusively. It’s some £300m more than in the same period last year.
The main threshold is the nil-rate band, enabling up to £325,000 of an estate to be passed on without having to pay any IHT. This has been unchanged since April 2009.
Unrelated to property but also coming in to the Treasury over the past quarter were income tax and National Insurance receipts up £17.6 billion between April and July 2022, thanks to 874,000 more employees, the July self-assessment deadline and the increase in National Insurance.
Helen Morrissey, an analyst at business consultancy Hargreaves Lansdown, says: “High employment, a strong housing market and burgeoning holiday demand means HMRC’s tax take keeps on rising. The burgeoning cost-of-living crisis has not dampened our demand for property with stamp duty receipts continuing to soar. This is reflective of lower tax rates being in play last year as the stamp duty holiday was in force.”
And Alex Davies, chief executive of Wealth Club, adds: “Inheritance tax reform is a potential vote winner for Rishi Sunak and Liz Truss among Conservative party members, but it’s hard to imagine it will be top of their agenda in any emergency Budget once they step into power.
“Cutting inheritance tax will do nothing to ease the cost of living crisis engulfing the country, and it’s a real cash cow for the Treasury too. IHT generates around £800m in tax revenue each month, a very meaningful sum at a time when 29m households are being given £400 each to offset energy bills.
“The increase in the monthly IHT take is being driven by soaring house prices and years of frozen allowances. With rampant inflation, the effect of freezing allowances will only increase in the years ahead unless the new Prime Minister chooses to intervene. While just four per cent of estates pay inheritance tax at the moment, without some review of the rules, more and more families are going to find themselves hit by death duties they might not have expected.”