Inheritance tax raid up by £600MILLION – as they’re set to exceed £8billion by finish of monetary yr

Bereaved families paid a staggering £5.7billion in inheritance tax in just eight months of this year.

The huge total in the lead up to November was £600million more than the same period last year, according to HMRC figures.

The year-on-year increase means inheritance tax bills look likely to exceed £8billion this financial year.

Families paid £7.6billion in inheritance tax in the last financial year, up from £7.1billion the year before.

Around one in 20 estates currently pay it, although Government estimates suggest this will rise to one in ten by 2030.

Rising property prices are pushing a growing number of estates over the threshold above which inheritance tax is payable.

The first £325,000 of inheritances are tax free, but above this they are taxed at 40 per cent. This threshold has not increased since 2009 and is frozen until 2030.

There is an additional allowance of £175,000 when the family home is left to direct descendants such as children or grandchildren, and this has also been pegged for five more years.

A series of changes announced by Chancellor of the Exchequer Rachel Reeves in her October Budget will draw even more legacies into the net

Families paid £7.6billion in inheritance tax in the last financial year, up from £7.1billion the year before (file image)

A series of changes announced by Chancellor of the Exchequer Rachel Reeves in her October Budget will draw even more legacies into the net.

Unused pensions will no longer be excluded from people’s estates for inheritance tax purposes from April 2027.

And from April 2026, the tax will be payable on inheritance agricultural assets worth more than £1million.

Farmers have warned that the changes will force them to sell off land that has been kept in their families for generations to pay the charges.

Nicholas Hyett, investment manager at Wealth Club said: ‘Inheritance tax continues to be the gift that keeps on giving, at least as far as the Government is concerned.

‘Yet again HMRC is increasing the amount that it’s milking from the estates of the recently deceased.

‘From April 2027 pension pots will fall into the taxman’s net as well, meaning even more families are dragged into paying this most hated of taxes.’