By James Rodger

Copyright birminghammail

HMRC has pursued UK households for £3.7 billion in an inheritance tax crackdown. The Labour Party government’s tax arm has raked in millions between April and August, up £200m on the same period a year ago. The raid comes as a result of “higher volumes of wealth transfers following recent liable deaths”, and government decisions since March 2021 to freeze the levy’s tax thresholds at 2020 to 2021 levels until 2029 to 2030. Inheritance tax affects estates worth over £325,000, which are liable to the 40% levy, with more estates being pulled into the bracket every year due to frozen thresholds and rising property prices. READ MORE Major update over calls for new 11pm to 9.30am bus travel rule in England Just four per cent of deaths resulted in this levy being paid between 2022 and 2023, according to HMRC data. Quilter tax and financial planning expert Shaun Moore says: “Frozen thresholds, high property values, and the scheduled inclusion of pensions in 2027 mean inheritance tax is set to grow further, making it a tempting, if controversial, source of additional revenue.” Key Advice & Air chief executive Will Hale adds: “Today’s numbers are a further reminder of the money that is leaking from estates and the importance of good financial planning in order to protect wealth for the next generation. “While part of the reason for the increase in inheritance tax receipts is down to recent rises in asset values, which is a positive for customers, it should be remembered that the government has consistently chosen to maintain tax-free thresholds at their 2020 to 2021 levels.” Hale went on, adding: “Judging by the ‘kite flying’ that is taking place in advance of the November Budget, there must be a high likelihood that not only will these tax thresholds be left untouched but also further measures implemented to boost public finances through increasing the tax take upon death.”