Data, data everywhere - what can we learn from HMRC's inheritance tax liabilities statistics?

Several policy changes to the IHT system were announced in the 2024 Autumn Budget. These included the introduction of restrictions to agricultural and business property reliefs from April 2026, and the extension of IHT to unspent pension pots at death from April 2027. Non-taxpaying estates which are classed as ‘excepted’ are no longer required to report their valuations to HMRC through tax forms. This means comparisons across years should be treated with caution. There is a difference between IHT liabilities created in respect of a particular tax year and receipts received by HMRC within a given tax year. This is because there is a delay between death and when a tax payment becomes due at least six months later. IHT can also be paid in instalments.

As a private client advisor, I have spent +25 years with my sleeves rolled up providing advice which is largely focussed on succession and taxation. Verifiable data can be usefully scrutinised to support the appropriateness of, and sense-test, advice.

Unsurprisingly, there is a good deal of interest, for many read ‘concern’, among clients in relation to taxation and, in particular, inheritance tax.

So what can we glean from HMRC's recently published inheritance tax liabilities statistics when set against previous published statistics?

The short answer is, regrettably, not a great deal.

The commentary forebodes us of the restrictions to agricultural and business reliefs and the extension of inheritance tax to unspent pension pots. It highlights that excepted estates, with an increasingly widening definition, are not captured. Further, there is the delay between the inheritance tax liability crystallising and when it's paid, which may straddle tax years. Finally, let's not forget the possibility of the invoking the instalment option (and for a minority of estates, acceptance [of assets] in lieu.)

The lacunas and variables mean that data comparisons 'across years should be treated with caution’.

Meanwhile, the succession and taxation advice continues.

Please contact Roderick Smith if you need help navigating the next iteration of UK inheritance tax.