HMRC raked in 'record' inheritance tax and insurance premium tax last month

Households paid record levels of inheritance tax AND insurance premium tax last month, HMRC data shows. Inheritance tax receipts were £85m higher in April 2024 than in April 2023 and insurance premium tax receipts are on track to reach record levels this year .

Laura Hayward, a partner at Evelyn Partners, said: "Even if thresholds and rates just remain frozen, the IHT net will be cast much wider and draw in families across the UK with fairly modest levels of wealth in real terms. The Office for Budget Responsibility forecasts that the share of deaths resulting in the payment of inheritance tax will rise to 6.3 per cent by 2028–29, the highest level since the 1970s.

"That proportion was as low as 2.7 per cent in 2009/10. The haul for the Treasury from IHT is likely to escalate in the coming years due to a particular demographic bump. As the wealthy baby boomer generation dies off in the next couple of decades, there will be a massive transfer of wealth."

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Nicholas Hyett, investment manager at Wealth Club said: “Contrary to popular belief, inheritance tax doesn’t just affect the super-rich. Frozen tax brackets mean many who would not consider themselves wealthy will find themselves falling into the IHT bracket in future.

“Their standard of living hasn’t changed, indeed inflation means it might have gone backwards, but the Government now considers them to be wealthy enough to face inheritance tax.” Quilter tax and financial planning expert, Shaun Moore, said: "It would be sensible for either party to reassess the UK's IHT landscape and change what is no longer fit for purpose. When the party manifestos are published later this year, we will see how both parties hope to evolve the inheritance-tax system that has been in a state of paralysis for too long, leading to these types of figures."

Cara Spinks, head of insurance consulting at OAC, said: "Despite a general cooling in premium inflation, demand for health insurance remains high as current NHS pressures and waiting lists mean private healthcare is an increasingly attractive option for individuals, and for employers wanting to maintain a healthy and active workforce. Employers are increasingly stepping in to fill the healthcare gap, offering their employees a range of tailored health insurance products such as PMI and health cash plans in order to protect the health and wellbeing of their staff.

"However, health conditions appear to be getting more complex, and ultimately more expensive to treat, which in part is driven by delays in early diagnosis and preventative treatment. This means that claim costs are rising and placing upward pressure on health insurance premiums."

She added: "Alleviating or removing IPT on health insurance products would be a sensible, strategic move to help employers and employees be productive and successful, reducing sickness related absenteeism and relaxing the burden on the NHS."