HMRC: Inflation and COVID-19 Pushed Inheritance Tax to New Record

Record-high inheritance tax (IHT) liabilities was driven by COVID-19, asset price inflation, and the government’s tax freeze, according to HM Revenue and Customs (HMRC). Official data published on Wednesday show 4.39 percent of UK deaths in the year 2021–2022 have resulted in an IHT charge, 0.66 percent up from the previous year. In the same year, the total amount of IHT payable was £5.99 billion, representing a 4 percent increase from the previous year and a 26 percent jump from a decade ago. According to HMRC’s analysis, the increase is likely due to a combination of factors, including higher volumes of wealth transfers following recent IHT-liable deaths, which were “caused at least in part by COVID-19,” recent rises in asset values, and the government’s decision to freeze IHT tax free thresholds instead of letting them rise with inflation....