Inheritance tax (IHT) receipts have grown by £1bn in the last year, according to figures released by HM Revenue and Customs (HMRC). This is the third year in a row that IHT receipts have increased – resulting in strong calls for reform, or even, abolition of the tax.
The rise in IHT receipts is likely to fuel the debate about whether the tax should be reformed. Some argue that IHT is an unfair tax that disproportionately affects the wealthy. Others suggest that IHT is an important source of revenue for the government, and that it should stay the way it is.
The debate about IHT is likely to continue in the run-up to the next general election. The government may be tempted to cut IHT in order to appeal to voters, but this would likely mean a loss of much needed revenue for the Treasury.
The longer-term future of IHT may be uncertain, but it is clear that the tax is here to stay for the foreseeable future. The rising house prices and ageing population are likely to keep pushing up IHT receipts, and this will keep the debate about the tax alive.
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