- Getty Images UK
Inheritance tax receipts have risen to their highest level since 1980 at nearly £5bn, according to official figures released by the government.
That is the highest point both in terms of the annual value of revenue, and revenue as a percentage of GDP.
The value of receipts dropped sharply after the 2008 financial crisis, as residential property prices plummeted. But revenues have increased steadily since 2009, rising significantly in 2015. This more recent change is attributed both to the rising value of assets, and to a higher number of deaths towards the end of 2014/15, compared with the same period in previous years.
Inheritance tax is a 40% levy paid on all assets over the value of £325,000 left by somebody in their will. It makes up a relatively small proportion of the total revenue generated in the UK by taxation, with personal income tax generating the most.
Although there has been a general upward trend in total revenue throughout the period, the value of inheritance tax receipts as a percentage of GDP has been more consistent since about 1985, bar the turbulent 2008 period.
Here is the graph:
A significant change from last year is the value of inheritance tax collected in April and May 2017, which is up 34.2%. This is due in part to the rising value of residential property in early 2016, compared with the more recent slowdown; the results of this sort of market change are not immediately noticeable, since inheritance tax is typically collected between six months and a year after somebody dies.
Revenue is expected to continue to rise in the coming years, despite the introduction in April of the ‘family home allowance,’ which allows families to pass on homes worth up to £1 million before being taxed.