On July 29, HMRC released inheritance tax statistics which showed receipts received by the Government during the 2020 to 2021 tax year totalled £5.4billion. This was an increase of four percent, £190million, on the 2019 to 2020 tax year. HMRC detailed this reversed a fall seen last year and means receipts have remained at broadly similar levels since the 2017 tax year. As the Government earns more from the tax, 33,000 people are thought to have been hit, up by close to a third, according to predictions from the Office for Budget Responsibility.
The Government will rake in an additional £1billion by 2026 by keeping the £325,000 inheritance threshold at its current level. The tax band has not risen since 2009, despite house prices rising by some 60 percent in subsequent years.
Conservative MP John Stevenson has warned this week that middle class families will be affected, while the wealthiest can avoid paying.
He said: “It is unfair the overall burden falls on the middle section of society, rather than the richest who have the greatest ability to pay.
“Middle-class families whose main asset is the family home are forced to pay in full while those at the top end have the resource and ability to avoid the duty via the various reliefs and exemptions at their disposal.
“We all know taxes are needed to fund public services, but they must be levied in a fair and equitable way.”
A Government spokesman said: “We’ve supported families across the UK during the pandemic with an unprecedented £352billion package of support.
“The vast majority of estates do not pay inheritance tax – and over the next five years more than 94 percent of estates are forecast to have zero inheritance tax liability.”
Mr Sunak is looking at a variety of ways to raise funds as the UK economy looks to recover from the pandemic.
READ MORE: Inheritance tax hike warning as Sunak ‘Needs to pay Covid bill’
“Once the Government comes up with proposals, it is highly likely that they will need to find more money, and you have to raise that from somewhere. Taxation is clearly one way of doing so.
“Rather than taxing a 20-year-old on their income to pay for social care for a 90-year-old who has their own house, it might be that inheritance tax could be a source of income.
“It wouldn’t be the most popular choice, a number of people really hate inheritance tax, but on the other hand, it is about this fairness point.
“It’s about is this a way of generating money to give the elderly a dignified later life with the care that they need.”